Use the function ClientToScreen to transfer the coordinates which are relative to your form window rather into screen coordinates. (Basically, the your form's x and y coordinate are added to your relative values).
For example, point (0, 0) would be the left upper corner of your form.
procedure PlaceMouse(x, y: word);
var
tp: TPoint;
begin
tp := ClientToScreen(point(x, y));
SetCursorPos(tp.x, tp.y);
end;