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My most important problem was destroying the lines of demarcation that separates what seems real from what seems fantastic.

- Gabriel García Márquez

"Magical realism" is a term applied to a narrative technique in which realistic and fantastical elements are seamlessly interwoven. The term was originally applied to the fiction of several prominent 20th century South American writers, most notably Gabriel García Márquez and Jorge Luís Borges, but has since been widely applied to fiction and film around the world, perhaps to the point of overuse.

A sense of magical realism is created by a refusal to acknowledge the fantastic. In a magical realism story, very human characters lead very ordinary lives but when fantastic elements begin to creep into the story both the characters and the narrator refuse to take any notice of them, mentioning them offhand and continuing on without further comment. The greatest of the South American magical realism stories is García Márquez's majestic novel One Hundred Years of Solitude.

The term "magical realism" was first coined in a 1925 essay by German art critic Franz Roh, who used it to refer to a certain style of art. The term was first appropriated into the realm of fiction in the 1960s by Venezuelan essayist and fiction writer Arturo Uslar Pietri, who applied it to a very specific South American genre. Since then the term was widely borrowed by critics of all stripes and applied rather haphazardly to all sorts of fictional forms.

In recent years the term has come under some criticism. Some critics contend that the term is too narrow and limiting, a reductionism that unfairly pigeonholes authors, while others have complained that the term is too widely applied, to the point of becoming hackneyed and virtually meaningless. Nevertheless, when judiciously applied, the term "magical realism" remains a powerful concept in literary criticism today.