Magical realism is a genre of fiction that blends elements of the extraordinary or miraculous with everyday life. It was made popular by Latin American writers in the 1940s, but it has been used by writers across cultures and time periods. Magical realism differs from fantasy novels, which create whole new worlds or create a whole new vision for the world in which we live. Instead, magical realism presents fantastical elements as if they are another aspect of our reality. You can incorporate magical realism into a short story, novella or longer novel.
Choose a Realistic Setting
Magical realism is set in the everyday world, so you should choose a setting for your story that is based on an actual location. You should not create a new world for your story. If you want to create your own town or place, it should be modeled after a real place, with buildings and people that you might find elsewhere. The setting can be at any time in history. However, it should not be in the future, which would be considered a fantasy setting.
Define a Thematic Event
To guide your story, you can first decide on a thematic event that will influence the plot. For example, in the short story "A Very Old Man with Enormous Wings" by Gabriel Garcia Marquez, a man is discovered with tattered wings. The rest of the story focuses on characters' reactions to the man and how he influences their lives. Similarly, you can choose one fantastical or extraordinary event to guide the rest of the action in your story. The main event should reflect a theme, such as change or faith.
Create Reflective Happenings
Many times, the miraculous or amazing things that happen in magical realism actually reflect the emotions of the characters or the theme of the story, like metaphors. The difference is that these are events and not just descriptions. For example, in "Like Water for Chocolate" by Laura Esquivel, the main character cooks dishes that cause those who eat them to feel what she is feeling. So if she is feeling amorous when she cooks, they soon begin feeling amorous, as well. You can infuse your story with these types of reflective events, instead of one controlling thematic event.
Experiment with Time
Time is not always linear in magical realism. There can be great shifts in the narrative timeline. A single moment can be made to feel like 100 years, or vice versa. The story can jump around without the use of flashbacks or flash forwards. Characters do not necessarily time travel -- though that can be an element of magical realism -- but their stories do not have to be told on a single timeline.