So I've been thinking and due to Moon Knight this really stuck me. Annihilation, Amenth, Mutant magic, Okkara, Otherworld(witch breed)
TLDR: I believe there is a mutant God of Magic that sealed Annihilation in Amenth created Okkara and sent it to Earth. All that is left is spells books from former worshippers under Okkara. Arrako mutants kept the knowledge while Krakoa mutants scattered and lost it. The hate for mutants is linked to the ancient mutant followers of this God who came to Otherworld and had a kingdom or multiple kingdoms ruled by mutants. Annihilation was most likely a bad mutant god that went rogue.
So let's start from the top Otherworld is a very magical place. The land itself if filled with magic as talked about by Meegan and Rictor. The land masses themselves take on very strange and different shapes since it connects different realities.
Okkara being a mutant homeland was home to extremely powerful mutant mages. That begs to question what created Okkara? Most people assume that it was simply a human that was transformed into its current shape but I don't believe that to be the case. Not only does the size of Okkara seem pretty insane for a simple mutation but mutants had to be living on Okkara after Annihilation was sealed in Amenth.(Power of X #4) Okkara was old before ancient was a word but not as old as as Annihilation's horde.
I think Okkara was the creation of this Godd from Otherworld that was moved to Earth. In order to save it from Annihilation before he/she was just a helm. Okkara has the X gene due to ancient mutant magic used to create it. I say this because of all the places that Annihilation chose to pop out of it choose the middle of the pacific on Earth even though Amenth was near Otherworld it choose Okkara with the Twlight Blade. Once again another magic item first the helm and now the sword. In X-men 12 we saw that Apocalypse created the gate as told to him by Summoner which we know was ordered by Annihilation showing a deep magical knowledge using mutant sacrifices.
Apocalypse is viewed as the first of the 2nd generation of mutants which means there had to be a 1st. Those 1st generation mutants must have been mutants born in Otherworld or migrated there. Selene being an exception. There are many earth eldar gods that exist in Otherworld. The Celtic gods being the ancient rulers of Avalon. Since mutants were more united during this time them having their own Pantheon would fit. I think what we are seeing in Otherworld is a sort of repeat of what happened in the past with mutants connected or controlling Kingdoms in Otherworld. Avalon = Braddock family , Crooket Market (Mad Jim Jaspers) , and Mercator (Absolon Mercator).
Mutants had these pantheons of mutants but over time do to separation and assimilation into the rest of humanity they lost their connection and thus the gods lost power if any even remain.
So how crazy am I and sorry for any mistakes I didn't proff read this was kind of off the top of the head.