So, I posted this theory in the "Is Okoto on Spherus Magna" topic a couple days ago, and this topic seems to be heading in this direction eventually, so I'll post it here too.
(warning text wall ahead)
We know that Bionicle follows the Many Worlds Theory, that is, that there are infinitely many parallel universes in the Bionicle multiverse, all happening simultaneously, examples of this include the Dark Mirror, and The Kingdom. I would propose that the Okotoverse is yet another one of these alternate universes, that split off from the prime universe some time in the distance past. This accounts for certain similarities and differences between the two, like why the toa all have the same names but not the same masks, why the mask of creation and the mask of time exist in both, why the nuva symbols hold great power in both, but Mata Nui, Artakha, Karzahni, and other notable characters are not found in the Okotoverse. It also explains why everything in G1 was explained with energized protodermis, while everything in G2 is explained with magic. To quote Thor "Your ancestors called it magic and you call it science. Well, I come from a place where they're one and the same thing." The villagers of the Okotoverse aren't highly industrial like the Matoran of Metru Nui. What the Matoran saw as science and mechanics, appears to be magic in the eyes of the villagers of Okoto.