The Yellow Moon of the world is the most prominent, but perhaps not the most striking. It bears a resemblance to Earth's moon due to its yellow color. It is also home to the Moon People, a race of short humanoid rabbits. This suggests it is capable of sustaining life, at least in the city of Yellow Drops visited by Toan in Dark Cloud. It is unclear as to how the Moon People traverse between the Yellow Moon and the Dark Cloud world (referred to occasionally as Terra), but the Moon Ship, long sealed in the Sun/Moon Temple may have been their original transport to the planet below. This could mean that the Moon People of Terra are born and bred there, hence their loss of the magic capable of resealing the Dark Genie.
10,000 years in the past, where Griffon and the Moon Flower Palace are originally based, it is the only moon in the sky.
The Blue Moon is the smaller of Terra's moons, always appearing behind the Yellow Moon. It is unknown if it orbits the Yellow Moon, or if due to their rotations and orbits they are always in such a position. 10,000 years in the past, when Max and Monica confront Griffon, it didn't exist. This suggests that it was created some time after, if it truly "existed" at all.
The Star of Oblivion, tool of the Ancient Ones, and lesson on the value of lifeEdit
The Dark Element, fueled by Sirus' hatred due to the destruction caused by the Atlamilia war in Alexandra's kingdom, invokes the Star of Oblivion, the falling Blue Moon that will destroy all life (although Griffon also mentions that one person obtaining all three Atlamillia would trigger it). Dark Element mentions it to be the work of "those ancient fools" (The Ancient Ones, probably Moon People), and appears to express mild surprise at what is happening.
It can probably be inferred that they set this up as some sort of weapon, and given that only a Guardian of the Stars Moon Person is able to halt its advance, that they had some form of failsafe. Such a weapon was created to wipe out greed in the world should all Atlamillia come into one person's hands, which in turn would mean that wars had been fought and the world placed in danger. But Sirus, upon the Dark Element's defeat, mentions:
"One day, there'll be no need for "The Star of Oblivion"...".
What this likely means is that although it was created in case humans, and the world (which is never explicitly named in Dark Cloud 2) grew too corrupt, the ancients believed there was still redemption. As Sirus later continues: "One day, when humans became "worthy"... "The Star of Oblivion" was to be stopped."
In other words, if humans could prove themselves "worthy" (perhaps because of their moralistic redemption via defeating Dark Element and their forgiveness of what may well be their most powerful enemy, after their lust for "shiny stones", Emperor Griffon), the knowledge to stop the Star could be employed. He finishes with "Now there is no need for the blue moon... Moon... You have fulfilled your purpose...". But if the purpose was, as the name suggests, the destruction of all life, which it failed in, what does Sirus mean?
Part of the memory locked away, along with the knowledge to disarm the moon, may be of its intended purpose: Not to destroy life, but to remind those who have forgotten its meaning of what it truly means; i.e. kindness, forgiveness, compassion, hope, all traits displayed by Max and Monica's efforts to make their world a better place and their forgiveness of Griffon, the one who wrought the destruction. The fact that Sirus calls them "my friends" in his dying words is proof of his and the Ancient Ones' approval that they are "worthy".
So after all this, rather than the harbinger of destruction that everyone initially thought Griffon/Sirus to be, it was all just an illusion created by darkness in peoples' hearts, and one confused little boy with a very heavy responsibility: to teach the world, through destruction and the threat of annihilation, what makes life important; not greed and power, but kindness and forgiveness. Is this what the ancients intended all along? Given that they made it possible for the Star of Oblivion to be stopped, perhaps so.
Connection to Earth and the reality of the Tales?Edit
So after this moralistic tale on right to life, what are we left with? Just one moon; the Yellow Moon that bears a striking resemblance to Earth's. Max and Monica ponder if, in a new era bathed in the light of a single moon, people will ever believe there were once two moons in the sky. But, Max laments, if people are anything like Sirus, sometimes we forget to take the special memories back out of our hearts again. And, like those things, too, their adventure may end up scattered upon the sands of time.
If we turn to the prologue of Dark Cloud, the book found in ruins, we may have our answer. Its pages are dismissed as the fantasies of a young boy and adventures that never happened, and a fantastic world with two moons illuminating the sky. Given that the story is dismissed as a fairy tale, due to its elements and the mention of two moons, one can assume that the world in which it was found, the "new era" Max and Monica discuss at the end of Dark Cloud 2, is accustomed to just one moon. It's not too much of a stretch to believe that this world could very well be Earth, and given that the tale of Dark Cloud never really happened due to Seda, Toan and friends' efforts (although Toan and Xiao do gaze knowingly at each other at the end of the game, evidence that those who fought may yet retain those memories) why couldn't this book, of a fantastic yet real past, be found on Earth? And if Max's lament of his adventure being forgotten is true, especially if because it too involves wondrous adventures under those two moons, why couldn't this episode of the past have been dismissed as myth. Again, to use a real world parallel, Heinrich Schliemann, re-discoverer of the Mykenaean civilization of Homer, did so by believing the literal truth of an old book from a mythical past (Homer's Illiad), that was coincidentally passed down orally in peoples' hearts before being committed to print.
Max, after his mother's departure, writes a letter of the adventure, another link to the true, forgotten past like Toan's book. As to whether or not, like Toan's tale, it was truly "real", Borneo mentions that the whole journey was like some kind of dream... "Castles in the air, moons becoming one..." Maybe already people have begun to forget the truth, or perhaps the dream-like nature was because the events, like Toan's journey, never truly happened in the one, true timeline.
Erik agrees with "Yeah, just like a dream." And to top it all off, Cedric says "Yer right. Yer journey WAS just a dream. There has always been just one moon. All of this may just have been a long, long dream, shown to us humans by the ancients to warn us." A dream, then? Shown by the ancients? In short, perhaps the tales of Dark Cloud are little more than just dreams or alternate realities, warnings from the Ancient Ones to value life. Seda turned his heart to darkness in his quest for victory against The West, corrupting himself and destroying the world. But in the end it never happened. Sirus, a descendant of the Ancient Ones sought to teach humans the price of their destruction through the Star of Oblivion. This, too, as seen above, may never have happened. But it may well have in some other reality or dream-state, so that the lessons of hatred and revenge survived, even if the original stories were dismissed as fairy tales or forgotten. Take from this what you will, and maybe this is reading into the games too much, but if these events never actually took place, and there has only ever been one moon, it might not be too much of a stretch to believe that the world of Dark Cloud is, in fact, Earth.
As Max says: "[People of the future will forget] the fact that I was here... And also, that, long ago, two moons shined down from the starry sky."