Board Thread:Episode Discussion/@comment-4141313-20181110034633/@comment-26397825-20181110175139

Or magical evolution applies; they installed a failsafe via magic that fi humanity was wiped out magic would evolved humans from animals. Faunus are not the step after humans but rather the step before, created by magic and perpetuating via magic shenanigans.

Or Salem screwed around with magic trying to speed up the process of humanity making a comeback and made the Faunus. Basically "flawed" versions of humans because she made an imitation of the brothers' creations.

Speaking of Ozpin...I think it's pretty safe to say that all Ozma is Ozma from the Wizard of Oz, Ozpin is the man behind the curtain, and Oscar is Dorothy. Just in case anyone was still iffy on Oscar;s allusion. And that lends credence to the idea that this is the important era beyond just RWBY being the focus; Dorothy was the one to get rid of the Wicked Witch, not the Wizard of Oz or Ozma, along with her trusty friends; the Tin Man, the Scarecrow, The Cowardly Lion, and Toto. And sometimes help from Glynda.