[RyanW]

I see different types of realistic. It can mean 'close to reality' or 'different from reality in believable ways.' In other words, a setting with unrealistic elements can still be called realistic if those elements are believably incorporated. Many fantasy settings don't make much effort to incorporate their magic believably, preferring instead to give many monsters and some citizens abilities that could transform the world, but still have all the visual trappings of Medieval Europe (castles, when wizards can fling the equivalent of artillery and dragons can fly, for instance).