Though the fantasy genre in its modern sense is less than two centuries old, its antecedents have a long and distinguished history. Elements of the supernatural and the fantastic were an element of literature from its beginning. The hallmarks that distinguish the modern genre from tales that merely contain fantastic elements are the logic of the fantasy workings, the acknowledged fictitious nature of the work, and the authorship of the elements, rather than their source in folklore.

Works in which the marvels were not necessarily believed, or only half-believed, such as the European romances of chivalry and the tales of the Arabian Nights, slowly evolved into works that showed these traits. Such authors as George MacDonald created explicitly fantastic works.

The publication of The Lord of the Rings by J. R. R. Tolkien created an enormous influence on the writing of the field, establishing the form of epic fantasy and also did much to establish the genre of fantasy as commercially distinct and viable.

Thomson Gale Brief definition of fantasy as a literary genre.

University of Chicago Excellent academic article discussing the origins of the word fantasy and its various definitions in different contexts, including its relevance to Antonin Artaud and in general as a contemporary theatre genre.

Wikipedia Entry on ‘magic realism’ that inlcudes an explanation of the characterisitcs of fantasy.

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