The funny thing is, there is no way I could really define literary magical realism, at least not in any way that could give it justice. So I’ll let someone else do it better, contrasting magical realism with fantasy.
Lyra Selene, Spellbound Scribes:
“In traditional fantasy, the author presents a whole new universe to the reader, complete with a system of logic, physical laws and metaphysical laws that must be followed. … In magical realism, however, magical elements blend with reality to create an atmosphere that is at once familiar and nonsensical, in an effort to access a deeper understanding of reality. These magical elements are presented in a straightforward manner with no effort made to explain how they could be occurring in the “real” world.”