The term was coined by German art critic Franz Roh in 1925. Subsequently borrowed to refer to Literature, its meaning went through a metamorphosis. The term is now most closely associated with Gabriel García Márquez, Author of One Hundred Years of Solitude. In this book, events are described for the most part realistically, but magical, mythical, and occult elements are introduced, often without explanation. This gives the reader the feeling that these things are everyday occurrences in the world the novelist has created, not worthy of an explanation. You should just accept them.
Examples of Magical Elements in One Hundred Years of Solitude are for instance, there is a single narrator, a family member, though the events chronicled cover a century—more than the average life span. The solitude is the result of life in colonial times, when distances to other colonies was great. The family lives cloistered in their own little bubble. Incest is therefore a recurrent theme, and the fear that a misbegotten deformed child with a pig’s tail will be born as a result hangs over them like a guilt-ridden cloud. Another magical element in the book is some of the characters seem to parallel mythical characters, or characters from native folklore. They would seem to inhabit both worlds simultaneously.
Following in the wake of Marquez were many other South American Authors, such as Isabel Allende, who wrote The House of Spirits, and was incidentally the daughter of Socialist leader Salvador Allende, overthrown by the CIA in a black bag operation. Just from the title, The House of Spirits, you know that magical elements will be present. Though not called a Magical Realist per se, South American Author and Critic Borges could be mentioned hear. Extremely well read, his writing, especially his tales and short stories, are always infused with a dose of mystery, magic, and the mythical. His Literary Criticism is very perceptive, especially when writing about Edgar Allan Poe or others of his ilk.
Science Fiction shares a lot in common with Magical Realism, except that in Science Fiction, the fictional world is scientifically possible, but strange, and mundane reality is sprinkled in to give it more validity. Both genres contain realistic and magical elements, but in different proportions. On the subject of Science Fiction I feel I should mention the work of Philip K. Dick, whose books transcended the Science Fiction genre, while maintaining loyalty to its basic precepts. There are, besides the gee whiz gizmos of Science Fiction, also occult, religious, and paranormal elements. Things that go beyond the realm of Science. Dick’s final novel was about a character based on Bishop James Pike, Bishop of the Episcopalian Church in San Francisco, who died in the desert near the Dead Sea„ searching for ancient scrolls of apocryphal gospel. Philip K. Dick was a personal friend of the Bishop and also had a keen interest in such quaint and curious volumes of forgotten lore. Dick himself had a religious vision, or a series of strokes—perhaps both, in February and March of 1974. Of course, Dick also experienced extremely altered states of consciousness from the rampant experimentation with hallucinogenic drugs that was going on at that time. One of his books was composed in consultation with the I Ching, the Book of Changes.
Speaking of which, another Science Fiction Author who practiced the Literary Style of Magical Realism was Rudy Rucker, who was a Bay Area Mathematics Professor. He read an obscure but brilliant first novel by a student at the college where he taught mathematics, William J. Craddock, that was titled Be Not Content. This novel chronicles the late 60s from the epicenter of the cultural shift, San Francisco, beginning just before the Summer of Love, but ending in the winter of our discontent. Rudy Rucker, by now an established Sci Fi Author with his own publishing company, found Craddock’s widow and published this out of print tome. He said it had initially inspired his own writing, and he called the style a kind of Magical Realism, but Rucker called his Literary Style Transrealism, as espoused in his 1983 essay, The Transrealist Manifesto. Rudy Rucker coined the term after reading Philip K. Dick’s book, A Scanner Darkly, but in the notes about why he chose to publish Be Not Content by William J. Craddock, he also cites it as an early inspiration. Though not perhaps his most Transrealist work, but his most successful Science Fiction would be the books in the Ware Tertrology: Software (1982), Wetware (1988), Freeware (1997), and Realware (2000). As for Transrealist novels, there is White Light (1980), and The Hacker and the Ants (1994). His most recent book is Turing and Burroughs (2012) where Beat Writer William S. Burroughs is a character who morphs into a chimeric, telepathic slug.
With this broader definition of the term, Magical Realism, or Transrealism, although I think this example has been called Post Post Modernism by some critics, is Infinite Jest and other books by David Foster Wallace. Add to this illustrious list, Thomas Pynchon, J.G. Ballard, Margaret Atwood, John Barth, Joanna Russ, and James Tiptree Jr.
The novels of Haruki Murakami seem to me a prime example, especially The Wind-Up Bird Chronicles and 1Q84.
There are other writers I could mention, but in a lot of ways, this “stuff” all goes back to the ideas of Carl Jung. Carl Jung was a psychiatrist who broke with Freud over certain disagreements the men had. I think that Freud was a brilliant thinker who had some ideas about how the mind works, but in some ways, was just wrong. Jung had a better understanding, but more than that, was open to the idea of magic, God, synchronicity-so much that Freud rejected if it could not be scientifically proven. Freud dismissed for instance the I Ching as superstitious mumbo jumbo while Jung was very intrigued by it, and even coined the term Synchronicity to describe meaningful coincidences that happen more than is statistically possible. His thoughts on religion, myths, and the collective unconscious would be extended by Joseph Campbell in such books as The Hero With 1,000 Faces that was used by George Lucas in conceiving of the updated hero myth of Star Wars. Freud was a pioneer of psychology and broke the ice, as it were, in interpreting dreams and other psychological phenomenon, resulting from repressed sexual urges. Since this was such a dicey topic, he felt he needed scientific facts to back him up. He didn’t have time for the mystical and he felt, superstitious investigations of Jung. However, when dealing with the mind, sometimes the subconscious mind can be a more powerful force than the conscious mind. As time goes on, more and more Writers and Artists, as well as Philosophers and Theologians, are exploring the ideas of Carl Jung.