>What kind of setting is this? Sci-fi? Fantasy? Alternate History? Close to real life?
Alternate history and modern day at the same time, sort of.
Setting starts around late antiquity when pagan greek women fleeing persecution load up on as many boats as they can and sail past the Pillars of Hercules. Eventually they land in a mystical archipelago in the Caribbean that doesn't show up on any map; they found out pretty quick that this island chain has magical properties, such as rendering them immune to age or the elements. The island also allows same-sex reproduction, and gradually their numbers grow, occasionally supplemented by other pagan women also fleeing persecution from Europe (an influx of norse women in the middle ages is the biggest by far).
>Men?
The male gender cannot exist on the archipelago, any man that attempts to sail or fly there is either turned away or magically transformed into a woman.
>How did lesbianism become normalized/institutionalized?
The magic of the island makes women almost constantly horny; if you weren't a lesbian before coming to the archipelago, you will be in short order. "Straight" as an orientation simply does not exist.