Dragon Quest X is an online game, though the phrase "MMORPG" hasn't been bandied around. This suggests it may take a more Phantasy Star Online?/Guild Wars approach to online gameplay rather than providing a truly persistent world. This side of things hasn't been explained fully as yet, but this week's issue of Japanese publication Weekly Shounen Jump (via Andriasang) reveals a few more details about the game's characters and world.
The setting is a world known as Astoldia. This world is split into four continents, each with their own dominant race. These continents are called Ogleed, home of the Ogres; Eltona, home of the Elves; Dwachakka, home of the Dwarves -- do you see what they're doing here?; Pukuland, home of the Pukuripo; and the Wena Islands, home of the Wedi. There's also a mysterious central area where unspecified Bad Things are happening. It's suggested that this central area is the home of the humans, no doubt called something like Humancularagua or similar. Jump's article suggests that players will only be able to play as Ogre, Elf, Dwarf, Pukuripo and Wedi characters, with the plot revolving a mystery surrounding the human world, though some early footage seems to suggest humans will be playable also.
Dragon Quest X is something of a departure for the series Square Enix once described as the franchise which would cling to tradition while Final Fantasy innovated. Information is still relatively thin on the ground at this time, but we should find out more at the Tokyo Game Show next week, when the game is scheduled to make an appearance in video form.