I loved this distiction/definition from The Fantasy Tradition in American Literature by Brian Attebery.
Any narrative which includes as a significant part of its make-up some violation of that which the author clearly believes is natural law– that is fantasy….
And fantasy treats these impossibilities without hesitation, without doubt, without any attempt to reconcile them with our intellectual understanding of the workings of the world or to make us believe that such things could under any circumstances come true.
I like this definition very much, and even more so when Attebery places it in contrast to science fiction (so frequently lumped with fantasy as a matter of course):
Science fiction spends much of its time convincing the reader that its seeming impossibilities are in fact explainable if we extrapolate from the world and science that we know.
This distinction is very good for the way my mind works. By giving myself “permision” to accept that the fantastic needs no explanation, I free up all sorts of brain cells to focus on what I’m actually interested in.