Where is Termina with respect to Hyrule?

Question

Termina is the land where the story of Majora's Mask takes place

However, if I understood the story line correctly (I might not have, so please correct me here if I'm wrong), MM takes place after the events of Ocarina of Time

In the beginning of OoT, kid Link lives in the Kokiri forest. At the end of the game,

Zelda converts Link to kid Link again, to compensate for the childhood he had to skip in order to become an adult to save Hyrule

However, after this, Link does not go back to the Kokiri forest, but apparently goes to Termina as a kid in MM. Why? What had Termina to do with anything that happened in Hyrule in OoT?

But my main question is, where is Termina? Is it in the same world as Hyrule or is it a parallel dimension or a different universe entirely? Can someone walk from Hyrule to Termina or are they only connected by magic? Or is it something entirely different and they aren't connected at all?

Answer 1

Termina is a "Parallel World", that is found when Link chases after the Skull Kid, in the Lost Woods. (Emphasis mine):

Termina is the land where the story of The Legend of Zelda: Majora's Mask unfolds. After the events of The Legend of Zelda: Ocarina of Time, Link searches for Navi in the Lost Woods. However, he is ambushed by a Skull Kid wearing a strange mask known as Majora's Mask. Chasing after the Skull Kid, Link falls down a hole inside a tree, and wakes up in Termina.

[...] Termina is often thought of as a parallel world to Hyrule. This is never directly stated in the game, though the manual does call Termina a parallel world.

Source

The direct route to Termina is never really explicitly pointed out anywhere, other than "in the Lost Woods". Since the Lost Woods has a powerful magical protection, said to cause wanderers to become irreversibly lost, in order to protect the Sacred Grove, where the Great Deku Tree lives.

it is said that if people wander in the forest for too long, they can turn into a monster

Source

As for the connection between the two games, MM occurs directly after the events of OoT, once Ganon is cut off from the Sacred Realm. Navi leaves, having fulfilled her duty, as set by the Great Deku Tree at the beginning of OoT

Navi the fairy... Help Link to carry out my will... I entreat ye... Navi... Good...bye...

Quote from OoT - After collecting the Leaf Stone.

At the beginning of MM, Link is searching for his "Lost friend". This is Navi, as they were separated at the end of OoT. Unfortunately, not much more information is given on this topic.

Answer 2

In 2000 it was considered a parallel world according the game manual and 'Hyrule Historia' book published in 2012. But apparently Nintendo had a mistake in the writing of its script, so to help children understand the existence of Termina they wrote in the new Hyrule Encyclopedia:

"Skull Kid's memories combined with Majora's dark powers turn the world into the land of Termina"

... which suggests that they modify the history of the saga as well as its chronology as they please

Remember that a similar case had occurred with Breath of the Wild; they didn't know where to place the events of that title in The Legend of Zelda saga, until they decided place it in a future common to the three timelines...

Going back to the theme of Majora's Mask, it is evident Link went beyond the Lost Forest to find some place that instead of being populated by Kokiri children, would be the town of origin where the forest fairies would appear for the first time. No wonder Navi intended to return to her first rightful place within the Farone region