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Magic Realism

Originally applied to art, it is now used mainly (though not exclusively) for fiction and has been applied primarily to Latin American fiction, with Gabriel García Márquez being the poster child. As for a definition, that is trickier. I like Gene Wolfe‘s tongue-in-cheek definition – Magical Realism is fantasy written in Spanish. I see what he means but it is not quite that. A simple definition might be that it is a style where the novel is written in a seemingly conventional realist style but fantastic elements appear as though they are normal (though inexplicable). More detailed and probably better definitions appear on the pages below. The Latin Americans of the Boom are the best-known but there are many writers using this technique all over the world.

Carey
Carpentier
Carter
Cheney-Coker
Donoso
Eco
Esquivel
García Márquez
Okri
Rushdie
Ransmayr

Other links

The Magical Realism Page
Magical Realism
Magic Realism
Magical Realism Theory, History, Community
Magic Realism and the Writings of Sarah Orne Jewett, Kate Chopin and Willa Cather
Last rites for magic realism
The laziness of magical realism