Alejo Carpentier introduced the term (lo real maravilloso) to literature in his prologue to El reino de este mundo (1949; The Kingdom of this World).  The Cuban novelist was searching for a concept broad enough to accommodate both the events of everyday life and the fabulous nature of Latin American geography and history.  Influenced by French Surrealism, Carpentier saw in magic realism the capacity to enrich our idea of what is "real" by incorporating all dimensions of the imagination, especially as expressed in magic, myth, and religion.

The term "magic realism," originally applied in the 1920s to a school of painters, is used to describe the prose fiction of Jorge Luis Borges in Argentina, as well as the work of writers such as Gabriel Garcia Marquez in Colombia, Gunter Grass in Germany, and John Fowles in England.  These writers interweave, in an ever-shifting pattern, a sharply etched realism in representing ordinary events and descriptive details together with fantastic and dreamlike elements, as well as with materials derived from myth and fairy tales.  Robert Scholes has popularized "metafiction" as an overall term for the large and growing class of novels which depart drastically from the traditional categories either of realism or romance, and also the term "fabulation" for the current mode of free-wheeling narrative invention.  These novels violate, in various ways, standard novelistic expectations by drastic --and sometimes highly effective--experiments with subject matter, form, style, temporal sequence, and fusions of the everyday, the fantastic, the mythical, and the nightmarish, in renderings that blur traditional distinctions between at is serious or trivial, horrible or ludicrous, tragic or comic.

Although originally intended for discussions of Hispanic literature, the term "magic realism" is now used in conjunction with a writers from any ethnic background.  The term is used to describe the mixing of reality and fantasy to create a world where everything is possible.