"Magic realism" is a term invented by literary critics initially to characterize the work, specifically, of Nobel Prize great Gabriel Garcia Marquez. I've seen it extended to some other South American and Spanish authors, like Vargas Llosa, Allende and Asturias, and I would include the work of Umberto Eco and Nigerian folk author Amos Tutuola under that umbrella. It's rather hard to define, but includes, at least for me, the evocation of a sense of strangeness anchored to realistic details and situations, through the use of a certain amount of narrative experimentation. In that sense, it doesn't really fit the concept of "Fantasy" in fiction as I understand it.