History as we know it is largely unchanged. The only real major difference in the world is that supernatural forces--magic, monsters, ghosts, demons, faeries, devils, angels, etc.--are real. This is known to only a tiny minority of people, one of whom might (or might not) be your character. For whatever reason, the Powers That Be prefer to further their ends in obscurity, allowing the overwhelming majority to believe that the supernatural is merely the stuff of legends.
As in the olden days of Mythic Europe, there are enclaves of wizards, there are those who work alone, there are those who labor to improve Mankind's lot, there are those who seek nothing but power, and there are Devil-worshipping nihilists. However, the Houses of Hermes are no more, lost in the sands of time like so many other ancient, secret societies. The modern magic-wielder is pretty much on his/her own: they may be bankers, lawyers, homemakers, veterinarians. More often than not, however, their Gift renders them "different" from the start, so that many are driven to the outskirts of society, becoming stage performers, professional psychics, homeless "kooks," or even members of organized alternative religions. They may not even be aware that they possess supernatural abilities; they merely sense that they are somehow different.
The flow of magic on this plane of existence has waned since the old days, and continues to do so. But it is far more active a force than most believe. In certain places, at certain times, under certain conditions, spells may be woven that rival those of bygone eras. Furthermore, modern manufacturing and refining allow for more precise measurement and better tools for the modern mage, cutting down on the time-consuming processes involved in spell research and magic item construction. Widespread literacy, contemporary teaching methods, and durable, more legible texts allow for greater efficiency in learning mystical concepts. Special ingredients, however, are often much harder to locate and/or are prohibitively expensive ("Mugwort grown under a corpse? Well, I'll just pop down to the local A&P...").
Since the Order of Hermes is no more, there really are no such thing as Covenants anymore (at least as far as the PCs know). You're on your own out there, unless you decide to team up, in which case we can use the Covenants rules from the Wizard's Grimoire as a guide to creating a Headquarters or Base of Operations. Obviously, many of the Covenant Virtues and Flaws will not apply, but others will be quite relevant.
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