The wizarding world is aware of many many types of beasts which the muggles doesn't know of, or at least only knows as mythology/legend. Why don't muggles know of mandrakes, centaurs, unicorns, trolls, dragons, etc on a factual level? Is this because all these critters live in the parts of the world that are somewhat masked off by magic (as are places like Hogwarts and so on)? Does the wizarding world make an active effort to hide these creatures via charms and enchantments? Do the creatures themselves possess cloaking powers or something? Are they simply too rare for us to find out about?
Answer
This is discussed at great length at the opening of "Fantastic Beasts and Where to Find Them" in a chapter labelled "A Brief History of Muggle Awareness of Fantastic Beasts"
Rather than copying the chapter wholesale (which I'd recommend you read), I'll summarise the key points:
Many fantastic beasts are known about, but are sufficiently rare that sightings are practically unheard of. This includes dragons, hippogriffs, unicorns, etc. Some are considered mythical and others presumed extinct
Many small creatures are seen regularly but are simply mistaken for mundane creatures
Many creatures possess their own magical defences (invisibility, extreme speed, etc)
Some creatures live in areas that are as-yet unexplored by muggles; deep jungle and at the top of mountains
Many creatures can only be seen by magical persons, either because of natural invisibility or because they've had disillusionment charms cast over them
Some live in areas marked as unplottable by the Ministry or in reservations that are continually monitored by wizards to prevent the creatures from escaping
Breeding of certain creatures is closely controlled to prevent population increase
The Ministry of Magic in each country is responsible for using memory charms on those that spot fantastic beasts
The Ministry of Magic has a Dept. of Misinformation intended to confuse muggles. This is accomplished by liaising with the muggle PM to put out credible cover stories for large events
International charter only protects a small number of species (27)
Muggles are often unwilling to speak of their experiences with magical creatures out of fear of appearing insane, foolish or drunk
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