Modern fantasy postulates a different reality. What I mean is that either the fantasy world is separated from our own reality, or, it is a hidden side of our own world. Very much like C. S. Lewis and his world called Narnia. The definition of the land in which fantasy is set (very much like Narnia) follows the basic disciplines of geography and history, to mention just two. The world tends to be defined on these distinctive levels, but also incorporates the parts: who is good and who is bad; also time (but I won’t delve into this in more depth here). What is really the premise that grabs our attention is this traditional set, and by this I mean the adventure, journey etc. (the tale) that takes place in our world from past to present, or sometime in the future; also in far unknown territories and worlds.
There is however, a second difference and that is the supernatural in fantasy is fictitious by design. “In traditional tales the degree to which the author considered the supernatural to be real can span the spectrum from legends taken as reality to myths understood as describing in understandable terms more complicated reality, to late, intentionally fictitious literary works.” [Quote from Wikipedia.]
Now is the right place to bring in the writer/author, the creator of the fantasy by using traditional elements. This is done by arranging his or her thoughts and creativity; individual interpretation. Whereas fantasy of old is classed as myth, folklore, legend etc today it is classed as either the academia of fantasy or the fantasy novel. There are very few in-between’s although historical fantasy springs to mind. What I mean is that variations of an old tale told in a new way, an adaptation lets say, varies the theme, the set. “the traditional tales were never intended to be separate from the local supernatural folklore. Transitions between the traditional and modern modes of fantastic literature are evident in early Gothic novels, the ghost stories, and Romantic novels, all of which used extensively traditional fantastic motifs, but subjected them to authors’ concepts.” [Quote from Wikipedia.]
It is strange to witness that any narrative creation before the ‘fantasy genre’ was defined cannot be considered to belong to it, despite how many fantastical elements it incorporates. By which, the genre includes the whole range of fantastic literature, both the modern genre and its traditional antecedents, as many elements which were treated as true (or at least not obviously untrue) by earlier authors are wholly fictitious and fantastic for modern readers. But even by the more limited definition a full examination of the history of the fantastic in literature is necessary to show the origins of the modern genre. I think this is very sad because I feel a re-classification would open up so many old stories to the contemporary reader. I would even go so far as to say that many of the old stories and fantasy tales hold true to the meaning than their modern relatives.
The whole study of fantasy is far from easy to define or attempt to answer. Tolkien had etymological worries in simply trying to define the elf-like term faerie [I suppose it is similar to the ambiguity of the term wonder-tale over fairy-tale, which scholars prefer.] This is because traditional works contain significant elements and structures which modern fantasy authors have drawn upon extensively for inspiration in their own sub-creations, but sometimes don’t understand the origins (or choose not to.) Fairies are supposed to be of elf-like origin, but instead ‘modernists’ have changed their visuals to little humans with wings. Is it a bad thing? No on the contrary it keeps the fiction alive and the mythology.
In closing it is warming to see that today’s fantasy continues to grow as well as now being a multi-layered medium encompassing many sub-genres of literature; from traditional high fantasy and Leiber sword and sorcery, to magical realism and urban, fairytale fantasy, horror-tinged dark fantasy and much more. With the new age of digital information and the eBook, it can only get stronger as a genre, cult or whatever you want to call it in years to come.