Common aspects of Magical Realism:
Contains fantastical elements
The fantastic elements may be intuitively "logical" but are never explained
Characters accept rather than question the logic of the magical element
Exhibits a richness of sensory details
Distorts time so that it is cyclical or so that it appears absent. Another technique is to collapse time in order to create a setting in which the present repeats or resembles the past
Inverts cause and effect, for instance a character may suffer before a tragedy occurs
Incorporates legend or folklore
Presents events from multiple perspectives, such as those of belief and disbelief or the colonizers and the colonized
Uses a mirroring of either past and present, astral and physical planes, or of characters
Ends leaving the reader uncertain, whether to believe in the magical interpretation or the realist interpretation of the events in the story
Note that it is common in some fantasy stories to include a frame story, in which the central, fantastic story is explained as a dream. Because the main story works equally well with or without the frame story, and since either way the reader feels no ambiguity about choosing between the magical and the real interpretation, these are usually not included in the category of magical realism.
The History of Magical Realism
The term magic realism was first used by the German art critic Franz Roh to refer to a painterly style also known as Neue Sachlichkeit. It was later used to describe the unusual realism by American painters such as Ivan Albright, Paul Cadmus, George Tooker and other artists during the 1920s. It should be noted though that unlike the term's use in literature, in art it is describing paintings that do not include anything fantastic or magical, but are rather extremely realistic and often times mundane.
The term was first revived and applied to the realm of fiction as a combination of the fantastic and the realistic in the 1960s by a Venezuelan essayist and critic Arturo Uslar-Pietri, who applied it to a very specific South American genre, influenced by the blend of realism and fantasy in M�rio de Andrade's influential 1928 novel Macuna�ma. However, the term itself came in vogue only after Nobel prize winner Miguel Angel Asturias used the expression to define the style of his novels. The term gained popularity with the rise of such authors as Mikhail Bulgakov, Ernst J�nger, and many Latin American writers, most notably Jorge Luis Borges, Isabel Allende, Juan Rulfo, Dias Gomes, and Gabriel Garc�a M�rquez, who confessed, "My most important problem was destroying the lines of demarcation that separates what seems real from what seems fantastic." The most widely read of the South American magical realism narratives is Garc�a M�rquez's novel One Hundred Years of Solitude. Today, magical realism is perhaps too broadly used, to characterize all realistic fictions with an eerie, otherworldly component, such as the tales of Edgar Allan Poe, or realistic fictions where magic is simply an overt theme in the narrative, such as The Stepford Wives or the Harry Potter books.