Yes, Tolkien is Wonderful, but...

[Nerwen]

I tend to regard magical realism as a sub-class of fantasy. I feel that it takes too much special pleading to argue that it isn't fantasy at all.

And yes, definitions are important. I'm not seriously saying anyone who uses the term magical realism is a humbug, because it does tell you something about the type of story you're dealing with. (However, I maintain that a lot of people read One Hundred Years of Solitude who would never have picked it up if it were classed as fantasy.)

I can't help thinking that as a genre (or sub-genre, according to me), magical realism has its own set of problems: the "anything can happen" principle can get taken much too literally, so that the story devolves into a series of arbitrary events.