So Mundus (Mundus) is the plane of existence that Nirn, its moons, and the other planets are in. Surrounding Mundus is Oblivion, and surrounding Oblivion is Aetherius.
Aetherius is the plane of existence that the Aedra came from. A commonly known part of Aetherius is Sovngarde. Aetherius is a plane of magic, and is where magic comes from. If that's where magic came from, then why is there magic in Nirn? Keep reading to find out.
Mundus is only the planets including Nirn because those planets are floating in Oblivion. Mundus is the creation of the divines. The idea was made by Lorkhan. He convinced the et'Ada to help make it. Those et'Ada who didn't help with the creation became the Daedra and those who did help became Aedra. Magnus was the main architect of the creation. Some of the et'Ada gave all of themselves to the creation. Only eight did, and those eight became the eight divines. Yeah, that's right, I said eight. Some gave themselves completely to them, that formed life on the ninth planet...Nirn.
After Mundus was created, Mangus disliked the creation, so he left to go back to Aetherius. He ripped through Oblivion, to get to Aetherius. His rip is seen as the sun, and through that rip, the magic of Aetherius leaks into Mundus. Other et'Ada followed him, and they left smaller holes, which are the stars.
The Ehlnofey were the ones that put themselves into the creation of Nirn. They didn't leave, some made a stable realm in Nirn, while others wandered. The ones that wandered, found the realm that the others made. They expected a warm welcoming, like a "hey brotha, long time no see". Instead a war broke out, it changed Nirn. It made the four continents that we know today. Tamriel, Atmora, Akavir, and Yokuda. The ones that didn't wander were known as the Old Ehlnofey, and the ones that wandered were the wandering Ehlnofey. The Mer are the descendants of the Old Ehlnofey, and the Men are descendants of the wandering Ehlnofey. It is also thought by some that Mundus is Mehrunes Dagon's plane of Oblivion. And he was banished by the mortals with the help of Akatosh. However, that was said by Mankar Camoran, so he could not be telling the truth.
Hope you liked this one :) Happy Learning!