its the latter. perhaps both. to be hones the story isnt the main point in this series, in general it wouldnt even get a 6/10 if it werent for its comedy and visuals. so yeah its more biased on the fever dream side
That's a bit more true of the manga, the anime at least has a whiff of this, but the LN kinda sorta has a story in the background that's being told through Cid's lens so all the details are a bit muddied (and the author likely has no idea what to do with them).
The way to think of it is like this: imagine Alpha is the protagonist and she frees herself, then starts freeing others. It's basically like a mid JRPG with Church Bad. Think FF7 with a rebel group(hence all the named references).
Now there's two things to toss in. The first? Alpha was never going to free herself. In fact, the bad guys won so hard in this world that any resistance is impossible. They've got all their tracks covered, and they have ancient technology and massive contingencies for anybody trying to kick them out. So this story wouldn't ever get off the ground except:
The second- Our boy Cid isn't trying to kick anybody out. He's just living his best chuuni life. Which they didn't account for, and is why nobody, not even Shadow Garden, can really understand Shadow Garden's motivations.
This is important in story because it's by far the furthest thing from being a dark isekai. Anything dark isn't part of Cid's isekai power fantasy. And anything with Cid is comedy. It's a comedy isekai that murdered a dark fantasy in cold blood and stole its identity.
Now: why is Earth involved? Because Earth being involved is the closest thing we'll get to Cid having any antagonist. Remember, his goals aren't to stop anyone, his goals are to be edgy. You could one-shot Cid by calling him cringe and telling Shadow Garden he made up exactly zero of his inventions. Earth is involved because it HAS to be.
The story is, in all likelihood, going to end with everyone catching on to Cid's bullshit, Shadow Garden imploding into a civil war over it, and Cid running away to a new world, having definitely absolutely positively learned his lesson until he finds another cute preteen girl suffering from a mana-based curse ten minutes later.
I do think you COULD try to make a story about Alpha and her mounting resistance vs. the church of Diabolos. And I think that story would be kinda mid if the author focused on it. It wouldn't be BAD, but I doubt I'd be able to remember, or even finish it.