- High Fantasy is the Illuminated History of Somewhere Else: Taking place in some isolated time or place that never existed, like Prydain or Middle Earth, and has its own history, rules, and spiritual compass of magic/religion to draw on. It's not meant to share anything in common with our world, except for the hero and the characters' journey having the same emotions as our own, just on a different playing field.
- Light Fantasy is magic intruding into our world, and everything else we know about it. Harry Potter's Platform 9-3/4, for example, being a part of real London stations, taking its students off to some magical school in the country the rest of us don't know about, unless you want to be spotted driving the family's flying car.
- Magical Realism is the trickiest one, since as the name suggests, it's so real, it COULD happen, if it weren't that elusively quirky twists of fate and/or possibly magic are driving the circumstances along. Without going into insufferably precious Nobel-winning Mexican literature, the movie Field of Dreams is the most textbook example of Magical Realism: Who's talking to Kevin Costner? What's making baseball ghosts appear? And what twist of fate is helping the characters all find each other so conveniently serendipically?...But, y'know, sure looks like it could happen, if, um, there really were such a thing as baseball ghosts.
- Science Fiction involves some actual concept of science, like space travel, robots or time travel, that's at least plausible in our lifetimes knowing what we now know, if not yet possible. If it's just there to speculate on the daily-life effects of something that hasn't happened yet, like genetic manipulation, or didn't happen, like how history would be different if some country had lost the war they won, then it's Speculative Fiction for doing all that speculating.
- Surrealism is just being strange to prove a point: Kafka didn't want to create some alternate universe about a legal-bureaucratic world when he wrote The Trial, or ponder the what-ifs about turning into a cockroach, he just wanted to lecture us with a series of allegorically depicted scenes to express his thematic observations, and string them together into a plot.
Fantasy is one thing where each genre's rules are such a central philosophical standpoint of the story, if you try to break one of the rules just to crossover or experiment, you end up breaking the genre.
Or as I like to put it, "The absolute worst thing you can do in a fantasy is Just Make It Up."