Although the genres are blending and the publishing categories seem to shift, what are the key differences between general fantasy, high fantasy, urban fantasy, and magical realism?
John Linwood Grant: Magical realism I'd probably set aside, as more akin to various 'liminal' and 'weird fiction' labels. It's an area where stories can be most strange, but would not be immediately recognizable to many who would describe themselves as 'fantasy fans' Sadly for this question, that's my main area a lot of the time. I might distinguish between secondary world fantasy and historical fantasy - the former not relying directly on certain aspects of human history, biology or geography; the latter being closely linked to re-imaginings of various cultures and societies of the past. With magic. Or dragons. Etc. There's also mock-secondary world fantasy, which relies on stuff we know but pretends to be different and just sticks extra moons in the sky. Urban fantasy is a thing of many faces, from teens with magic fingers to slavering werewolves in Chicago. Hugely variable.
Ian Totten: I suppose it depends on what you're going for when it comes to genre specific fantasy. I always thought of high fantasy as being in the vein of LOTR or The Sword of Truth series. My own series is labeled dark fantasy, but I recently had a reader tell me they thought of it as high fantasy so I guess it's subjective to the individual. As for the other sub-genres, I admit to knowing little about them.
Hilaire Barch: I think the others covered the definition, but I'd like to add that each one has a certain feel to it. The pacing of the story and the rhythm of the prose differs among those. You can blend and mix, etc which changes things, but if it carries the label certain expectations are attached.
High fantasy need not have elves and orcs (think Jacqueline Carey's Kushiel series, or the King Arthur stories), but there's often epic games of power, highly descriptive prose, and often much history or lore given to the reader.
Urban fantasy carries a grit to it, with faster-paced action and lore or history thrown in on a need-to-know basis, and as mentioned has a lot of variance.
Magic realism can blend with the others or be it's own thing.
The genre cubby hole matters for marketing. Once upon a time I simply wrote the story. I don't write to the market, but I did become cognizant of that feel/pacing I mentioned. If I want my story to be a high fantasy, even if blended, it needs to feel and read as one.
Do these differences even matter anymore? Why or why not?
John Linwood Grant: Do the labels matter? Yes, for publishers and authors wanting to tap into existing markets. Large chunks of the reading public are conservative in their buying, selecting genres and sub-genres where they anticipate a well-matched return for their bucks, either as comfort reads or as sharing elements with other books in the area which they like. And many of those chunks are loyal to a concept of 'fantasy' or crime' or 'western' - whatever. If they want wild magickal adventures and stirring battles, they don't necessarily want to read about an oppressed kid in Lagos who discovers he can feel the spirits of the trees as he confronts his abusive family. Thought they probably should, for the experience. ;)
Ian Totten: When writing though I tend to enjoy whatever the genre for the story is and will blend them at will. An example would be mixing magic into a real world story. Not enough to make it hokey, but enough to invoke a sense of curiosity and wonder.
Derrick Ferguson: Whenever I hear/read somebody complain about how they don't like labels and they don’t see why anything has to be labeled…tell you what we’re gonna do. We’re going to take all the labels off the canned foods in your local supermarket and let you guess what’s inside those cans the next time you go shopping.
Danielle Procter Piper: Pretty sure the only people really concerned about pigeonholing books into genres are publishers, marketers, and booksellers who seem unable to figure out how to tell people about them otherwise. I don't write for market. I write the stuff I'd like to read. Life isn't a genre, so I'm not going to tweak my stories to fit someone else's idea of what the lives of my characters should be called. It's not my fault if someone who stands to make money off what I do and probably never read any of it can't decide what color carrot to wave before the noses of his or her target audience... if they can even figure out who that target audience is. Many of the greatest things in life defy labels. We see the greatness, the genius, and wonder of things better when they're new, original, fresh, and unexpected. Some desk jockey in marketing can't figure out how to sell that... might explain why he lacks the imagination to be a writer.
John Linwood Grant: I do predict that people will announce high fantasy is dead, that grimdark has had its day, that urban fantasy is written-out and much more. And mainstream authors will write fantasy but insist that it's magical realism or liminal literature. After those shocking revelations, people will go on writing and reading whatever appeals to them.