Many people see the word “fantasy” and have a concrete impression of the genre. Any singular image for a genre as large as fantasy will leave out a lot. Fantasy is a very complex genre with many subgenres. In order to consider fantasy as a whole in any context, one must have knowledge of at least most of those subgenres.
The four most prevalent subgenres of fantasy are epic fantasy, urban fantasy, contemporary fantasy, and heroic fantasy.
Epic fantasy, interchangeably called high fantasy, although some writers consider them separate subgenres, is notable for its massive scope, slow pacing, and high amount of magic. Lord of the Rings is the most widely-known epic fantasy novel/series.
Urban fantasy is often set in urban areas, although the subgenre has grown to the point that location is not of chief importance. Urban fantasy crosses real-world society with supernatural society, often fey society. Mentor/student foils are very common in urban fantasy. Television shows and novels like Buffy the Vampire Slayer with a “chick kicking butt in leather” are urban fantasy.
Contemporary fantasy is tough to nail down. The Harry Potter series may be considered contemporary fantasy, although the case can be made that it fits better as urban fantasy. Contemporary fantasy, like urban, tends to be set in the real world at the current time. The distinction, typically, is that in contemporary fantasy the fantastical qualities of the world are known to many, while in urban fantasy very few people are aware.
Heroic fantasy, sometimes mislabeled as Sword and Sorcery, is characterized by a heroic protagonist and small or medium-sized scope. Swords, sorcery, and mythology, typically German or Norse mythology, are often present. Robert E. Howard’s Conan stories are heroic fantasy.
Regardless of subgenre, any type of fantasy can be labeled “dark fantasy” under certain conditions. “Dark fantasy” denotes fantasy with qualities of horror fiction or general macabre. Garth Nix’s Abhorsen Chronicles books are dark fantasy.
Paranormal is the term attached to any genre with basic, but only basic, qualities of fantasy. Currently, paranormal romance is the most popular form of paranormal fiction. The Twilight Saga is “paranormal.” If a work of fiction is “paranormal,” it’s inherently fantasy, although it is probably multiple genres.
There are several subgenres of fantasy that are also subgenres of other genres. The two most common are steampunk and space opera.
Steampunk is a combination of several genres. One is fantasy. Steampunk stories are typically set in the Victorian era, but the technology is different. As the name may suggest, steam-power is almost always important in steampunk settings. The most recent remake of The Three Musketeers contains steampunk elements, which in themselves include elements of fantasy, science-fiction, historical fiction, alternate history, romance, and/or horror.
Space opera is where the line between fantasy and science-fiction blurs. Some consider it fantasy, others science-fiction. Star Wars and Star Trek are both considered space opera. Science as we know it is completely disregarded on multiple planets in both settings, which some argue makes space opera a subgenre of fantasy. The often futuristic settings of space opera stories make them appear to be science-fiction. To be fair, space opera can be regarded as a subgenre of both science-fiction and fantasy.
Sword and Sorcery is probably the least-respected subgenre of fantasy. It used to be one of the main fantasy subgenres, but has become a niche genre. If there are wizards and rogues working together in a story, it is probably Sword and Sorcery. The role-playing game Dungeons & Dragons is the foremost example of Sword and Sorcery.
Low fantasy has low levels of magic. Sometimes works are classified as low fantasy without containing any magic whatsoever, so long as they have a secondary-world setting. Low fantasy is fairly rare and the term is rarely used.
Magic realism is sometimes called a subgenre of fantasy and other times considered a genre of its own. Magic realism is essentially low fantasy with a real-world setting. Often only one or two fantastical qualities exist in each story. Writers such as Ray Bradbury experimented a lot with magic realism before science-fiction hit big in the early twentieth century.
With almost a dozen subgenres and distinctions, fantasy covers many different types of stories, some of which barely resemble one another. All things considered, fantasy is probably the most complex genre out there.