Earth

The earth (地 chi?), also referred to as Sonic's world (ソニックの世界 Sonikku no sekai?), is the main planet and overall setting in the Sonic the Hedgehog series. The planet was originally unnamed except in other media, in which most early continuities instead took place on the fictional planet Mobius. With few exceptions, the planet's name in the games was never mentioned; however, games were generally assumed to take place on an Earth-like planet, with some locations based on real-world places. The English translators of Sonic Adventure 2 opted for “earth”, which has been reused in many scripts afterwards.

In Sonic X, it is revealed that Sonic, his friends and Eggman originate in an alternate reality version of Earth. A long time ago, Sonic's world and Earth were once one, but a cataclysmic event split the planet into two and sent them to different dimensions. The flow of time in Sonic's world is considerably slower than on Earth, with one month in Sonic's world equaling an entire year on Earth.

When Sonic came to Earth, the two worlds began to merge into one once again, which would ultimately stop the flow of time completely, thus forcing Sonic and co. to return to their world.

Trivia

 * A common misconception is that Japanese materials have always explicitly named Sonic's planet Earth. However, virtually all instances of earth (地 chi?) really have multiple meanings (such as surface, ground, etc.), so a more accurate and less confusing translation would probably be "the planet" since the implication is that it suggests a life-sustaining home world. Japanese sources ultimately do not use the literal word Earth (地球 Chikyū?) to directly refer to the planet.
 * Sonic Chronicles: The Dark Brotherhood is the first and only game in the series so far to use the terms ‘earth’, ‘Sonic's world’ and ‘Sonic's World’.