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The term you are looking for is magical realism. This is when supernatural elements (magic, djinns, wishes, fae, dragons, elves, talking gargoyles, people with wings, meddling gods, spells, demons,...
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Source: https://writers.stackexchange.com/a/21185 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#3: Attribution notice added
Source: https://writers.stackexchange.com/a/21185 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
The term you are looking for is [**magical realism.**](https://en.wikipedia.org/wiki/Magic_realism) This is when supernatural elements (magic, djinns, wishes, fae, dragons, elves, talking gargoyles, people with wings, meddling gods, spells, demons, and so forth) exist alongside what we consider the "real world," and everyone considers it normal. If this takes place in a contemporary setting, it's often called _urban fantasy,_ although this is not how you are describing your story. The difference between magical realism and plain ol' fantasy is primarily the setting: if it's on some other world, a vaguely defined Dark or Middle Age Europe, pre-Saxon Britain, Ancient Greece/Rome, or any other culture from so long ago that historical records are scarce, that's generally just fantasy. If you research your time and place thoroughly, however, and write it so that it is accurate and realistic, it would be magical realism. There is a difference between "fantasy" and "surreal," however. Fantasy, urban or classical, can be extremely straightforward and clear (see the works of CE Murphy and Mercedes Lackey respectively for examples). _Surreal_ is when things are just slightly off, or everything is a bit weird and dreamlike. Narration tends to consist of a lot of run-on sentences, and events sound like a Dali painting. _(The man walked by me, his face melting into feathers, blue to gold to orange to white to blue again in a ceaseless stream, the wind whipping them into flames, which fluttered off and became dancing leaves, glowing and gleaming and tumbling end-over-end like glittering fish in a rippling river of time unending. He tipped his smoldering hat to me as he passed.)_