All 3 games end in a similar way: The town/village they are in is fake
CV - Village members are all robots, built to live in the town
DB - Town is a figment of imagination
UF - It's a replica of London with people hired to be the future residents

My guess is that it's the Land of Smoke and Mirrors, which would explain both the specter and any magic Luke's girlfriend has or otherwise claims to be in possession of.

Since we've got De Scole now, and he's a pretty theatrical person (and, going by Eternal Diva, a brilliant inventor), it's not too much of a stretch to say that Specter's Flute town is his creation and it is, in fact, all smoke and mirrors with a bit of anachronistic technology and projectors.