The muggles already know about the wizarding world. At least the prime minister and those in high levels of government. But when the rest of the world finds out that the wizarding world is responsible for allthese "terrorist" actions because they cant keep their civil war on their own grounds then the muggle world reacts by extermination.
Personally i have no prob with people who have some kind of ability. But the wizarding world that destroys the muggles because they have the power or just some stupid idiot feels the need to kill some muggles then its all fair. you dont attack a set of people time and time again and not expect them to hate your kind inturn