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.
Even the most fantastic myths, legends and fairy tales differ from modern fantasy genre in three respects:
Modern genre fantasy postulates a different reality, either a fantasy world separated from ours, or a hidden fantasy side of our own world. In addition, the rules, geography, history, etc. of this world tend to be defined, even if they are not described outright. Traditional fantastic tales take place in our world, often in the past or in far off, unknown places. It seldom describes the place or the time with any precision, often saying simply that it happened "long ago and far away." (A modern, rationalized analog to these stories can be found in the Lost World tales of the 19th and 20th centuries.)
The second difference is that the supernatural in fantasy is by design fictitious. In traditional tales the degree to which the author considered the supernatural to be real can span the spectrum from legends taken as reality to myths understood as describing in understandable terms more complicated reality, to late, intentionally fictitious literary works.
Finally, the fantastic worlds of modern fantasy are created by an author or group of authors, often using traditional elements, but usually in a novel arrangement and with an individual interpretation. Traditional tales with fantasy elements used familiar myths and folklore, and any differences from tradition were considered variations on a theme; the traditional tales were never intended to be separate from the local supernatural folklore. Transitions between the traditional and modern modes of fantastic literature are evident in early Gothic novels, the ghost stories in vogue in the 19th century, and Romantic novels, all of which used extensively traditional fantastic motifs, but subjected them to authors' concepts.
By one standard, no work created before the fantasy genre was defined can be considered to belong to it, no matter how many fantastic elements it includes. By another, the genre includes the whole range of fantastic literature, both the modern genre and its traditional antecedents, as many elements which were treated as true (or at least not obviously untrue) by earlier authors are wholly fictitious and fantastic for modern readers. But even by the more limited definition a full examination of the history of the fantastic in literature is necessary to show the origins of the modern genre. Traditional works contain significant elements which modern fantasy authors have drawn upon extensively for inspiration in their own works.
The history of French fantastique literature is covered in greater detail under Fantastique.
With increase in learning in the middle of the medieval European era, there appeared beside earlier myths and legends also literary fiction. Among the first to appear was the genre of romance. This genre embraced fantasy, and not only simply followed traditional myths and fables, but, in its final form, boldly created new marvels from the whole cloth.
Romance at first dealt with traditional themes, above all three thematic cycles of tales, assembled in imagination at a late date as the Matter of Rome (actually centered on the life and deeds of Alexander the Great), the Matter of France (Charlemagne and Roland, his principal paladin) and the Matter of Britain (the lives and deeds of King Arthur and the Knights of the Round Table, within which was incorporated the quest for Holy Grail).
The romances themselves were not entirely believed, but such tales as Valentine and Orson, Guillaume de Palerme, and Queste del Saint Graal were only the beginning of the fantasy genre, not fully removed from belief.
During Renaissance romance continued to be popular. The trend was to more fantastic fiction. The English Le Morte d'Arthur by Sir Thomas Malory (c.1408–1471), was written in prose; this work dominates the Arthurian literature, often being regarded as the canonical form of the legend. Arthurian motifs have appeared steadily in literature from its publication, though the works have been a mix of fantasy and non-fantasy works. At the time, it and the Spanish Amadis de Gaula (1508), (also prose) spawned many imitators, and the genre was popularly well-received, producing such masterpiece of Renaissance poetry as Ludovico Ariosto's Orlando furioso and Torquato Tasso's Gerusalemme Liberata. Ariosto's tale, with its endlessly wandering characters, many marvels, and adventures, was a source text for many fantasies of adventure. With such works as Amadis of Gaul and Palmerin of England, the genre of fantasy was clearly inaugurated, as the marvels are deployed to amaze and surprise readers.
One English romance is The Faerie Queene of Edmund Spenser. The poem is deeply allegorical and allusive, Leaving allegory aside, however, the action is that of a typical knightly romance, involving knightly duels, and combats against giants and sorcerers. That is probably the first work in which most of the characters are not men, but elves (although the difference seems to be rather little). There are mentioned also the wars between goblins and elves, which were destined to have a great future in fantastic fiction.
The tale of Don Quixote deeply satirized the conventions of the romance, and helped bring about the end of this time of romance, although assisted by other historical trends in fiction. Nevertheless, large subgenres of the field of fantasy have sprung from the romance genre, either directly or through their imitation by latter fantasy writer William Morris.
Literary fairy tales, such as were written by Charles Perrault, and Madame d'Aulnoy, became very popular, early in this era. Many of Perrault's tales became fairy tale staples, and influenced latter fantasy as such. Indeed, when Madame d'Aulnoy termed her works contes de fée (fairy tales), she invented the term that is now generally used for the genre, thus distinguishing such tales from those involving no marvels. This would influence later writers, who took up the folk fairy tales in the same manner, in the Romantic era.
This era, however, was notably hostile to fantasy. Writers of the new types of fiction such as Defoe, Richardson, and Fielding were realistic in style, and many early realistic works were critical of fantasical elements in fiction. Aside from a few tales of witchcraft and ghost stories, very little fantasy was written during this time.
In one respect, this was an essential stage in the development of fantasy as a genre. The development of a realistic genre ensured that fantasy could be defined as a distinct type, in contrast.
In reaction to Enlightenment's cult of Reason, Romanticism highly prized the supernatural, tradition and imagination, together with the age in which they were supposed to rule - Middle Ages. These traits readily borrowed traditional elements of the fantastic. The Romantics invoked the medieval romance as justification for the works they wanted to produce, in distinction from the realistic pressure of the Enlightenment; these were not always fantastic, sometimes being merely unlikely to happen, but the justification was used even from fantasy.
One of the first literary results of this fascinations was Gothic novel, a literary genre that began in Britain with The Castle of Otranto (1764) by Horace Walpole. It is the predecessor to both modern fantasy and modern horror fiction and, above all, has led to the common definition of "gothic" as being connected to the dark and horrific. Prominent features of gothic novels included terror, mystery, the supernatural, ghosts, haunted buildings, castles, trapdoors, doom, death, decay, madness, hereditary curses, and so on. The fanastic, dream-like atmosphere pervaded the genre at this point. Gothic tales permitted, but did not require, an element of the supernatural. Some stories appeared to contain such elements and then explained them away. The genre straddled the border between fantasy and non-fantasy, but many elements from it, particularly the houses of particular import, being ancient, owned by nobles, and often endowed with legends, were incorporated in modern fantasy.
Of particular importance to the development of the genre was that the Gothic writers used novelistic techniques, such as Defoe was using, rather than the literary style of the romance, and also began to use the landscape for purposes of expressing the characters' moods.
On the other hand, the Gothic still held back the pure fantasy. In The Castle of Otranto, Walpole presented the work as a translation; the fictious original author is therefore responsible for its fantasical elements, which Walpole distances himself from.
In the early Victorian era, stories continued to be told using fantastic elements, less believed in. Charles Dickens wrote A Christmas Carol, using novelistic characterization to make his ghost story plausible; Scrooge at first doubts the reality of the ghosts, suspecting them his own imagination, an explanation that is never conclusively refuted.
The literary fairy tale, begun with Giovanni Francesco Straparola and Giambattista Basile and developed by the Charles Perrault and the French précieuses continued in the hands of such authors as William Makepeace Thackeray, but The Rose and the Ring showed many elements of parody. Hans Christian Andersen, however, initiated a new style of fairy tales, original tales told in seriousness. From this origin, John Ruskin wrote The King of the Golden River, a fairy tale that uses new levels of characterization, creating in the South-West Wind an irascible but kindly character similar to the latter Gandalf.
It was in the late 1800s and early 1900s, that modern fantasy genre first truly began to take shape. The history of modern fantasy literature begins with George MacDonald, the Scottish author of such novels as The Princess and the Goblin and Phantastes the latter of which is widely considered to be the first fantasy novel ever written for adults. MacDonald was a major influence on both J. R. R. Tolkien and C.S. Lewis. Their literary group, The Inklings was originally created for the purpose of studying MacDonald's work and creating new writings in the author's style.
The other major fantasy author of this era was William Morris, a socialist, an admirer of Middle Ages, a reviver of British handcrafts and a poet, who wrote several fantastic romances and novels in the latter part of the century, of which the most famous was The Well at the World's End. He was deeply inspired by the medieval romances and sagas; his style was deliberately archaic, based on medieval romances. In many respects, Morris was an important milestone in the history of fantasy, because, while other writers wrote of foreign lands, or of dream worlds, Morris's works were the first to be sent in an entirely invented world: a fantasy world.
These fantasy worlds were part of a general trend. This era began a general trend toward more self-consistent and substantive fantasy worlds. Earlier works often feature a solitary individual whose adventures in the fantasy world are of personal significiance, and where the world clearly exists to give scope to these adventures, and later works more often feature characters in a social web, where their actions are to save the world and those in it from peril. In Phantastes, for instance, George MacDonald has a mentor-figure explain to the hero that the moral laws are the same in the world he is about to enter as in the world he came from; this lends weight and importance to his actions in this world, however fantastical it is.
Authors such as Edgar Allan Poe and Oscar Wilde (in The Picture of Dorian Grey) also developed fantasy, in the telling of horror tales, a separate branch of fantasy that was to have great influence on H. P. Lovecraft and other writers of dark fantasy.
Despite MacDonald's future influence, and Morris' popularity at the time, it was not until the turn of the century that fantasy fiction began to reach a large audience, with authors such as Lord Dunsany who, following Morris's example, wrote fantasy novels, but also in the short story form. He was particularly noted for his vivid and evocative style. His style greatly influenced many writers, not always happily; Ursula K. Le Guin, in her essay on style in fantasy "From Elfland to Poughkeepsie", wryly referred to Lord Dunsany as the "First Terrible Fate that Awaiteth Unwary Beginners in Fantasy", alluding to young writers attempting to write in Lord Dunsany's style.
H. Rider Haggard developed the conventions of the Lost World sub-genre, which sometime included fantasy works as in Haggard's own She. With Africa still largely unknown to European writers, it offered scope to this type. Other writers, including Edgar Rice Burroughs and Abraham Merritt, built on the convention.
Several classic children's fantasies such as Peter Pan and The Wonderful Wizard of Oz were also published around this time. Indeed, in the earlier part of the 20th century, C.S. Lewis noted that fantasy was more accepted in juvenile literature, and therefore a writer interested in fantasy often wrote in it to find an audience.
E.R. Eddison, another influential writer, wrote near the end of this era. He drew inspiration from Northern sagas, as Morris did, but his prose style was modeled more on Tudor and Elizabethan English, and his stories were filled with vigorous characters in glorious adventures. His characters were often of great ability and noble, if not royal, birth. These characters have been admired for his work in making his villains, particularly, more vivid characters than Tolkien's. Others have observed that while it is historically accurate to depict the great of the world trampling on the lower classes, his characters often treat their subjects with arrogance and insolence, and this is depicted as part of their greatness. Indeed, at the end of The Worm Ouroboros, the heroes, finding peace dull, pray for and get the revival of their enemies, so that they may go and fight them again, regardless of the casualties that such a war would have.
At this time, the terminology for the genre was not settled. Many fantasies in this era were termed fairy tales, including Max Beerbohm's The Happy Hypocrite and MacDonald's Phantastes. The name "fantasy" was not developed until later; as late as J.R.R. Tolkien's The Hobbit, the term "fairy tale" was still being used.
Several of the genre's most prominent authors began their careers in these magazines including Clark Ashton Smith, Fritz Leiber, Ray Bradbury and most noticeably H. P. Lovecraft. Lovecraft was deeply influenced by Edgar Allan Poe and to a somewhat lesser extent, by Lord Dunsany; with his Cthulhu Mythos stories, he became one of the most influential writers of fantasy and horror in the twentieth century. The early works of many Sword and Sorcery authors such as Robert E. Howard also began at this time. By 1950, sword and sorcery had begun to find a wide audience, with the success of Howard's Conan the Barbarian, and Fritz Leiber's Fafhrd and the Gray Mouser stories. Howard's works, especially Conan, were to have a noteworthy, even defining, influence on the sword and sorcery subgenre. They were tales of vivid, larger-than-life action and adventure, and after the work of Tolkien, the most widely read works of fantasy. Leiber's stories were particularly noted for their uncommon realism for the time; Unknown developed this trait, with many stories in it showing credibility and realism. Like Morris and Eddison before him, Leiber continued the tradition of drawing on Northern European legend and folklore. C.L. Moore was among Howard's first imitators, with "The Black God's Kiss", in which she introduced Jirel of Joiry and the heroine protagonist to sword and sorcery.
However, it was the advent of high fantasy and, most importantly, the popularity of J. R. R. Tolkien's The Hobbit and The Lord of the Rings which finally allowed fantasy to truly enter into the mainstream. Tolkien had published The Hobbit in 1937 and The Lord of the Rings in the 1950s; while the first was a juvenile fantasy, the second was an epic fantasy of great scope and seriousness. Although Tolkien's works had been successful in Britain, it was not until the late 1960s that they finally became popular in America; however, at the point, they began to sell, and sell steadily, in large numbers. Numerous polls to identify the greatest book of the century found The Lord of the Rings being selected by widely different groups.
It is difficult to overstate the impact that The Lord of the Rings had on the fantasy genre; in some respects, it swamped all the works of fantasy that had been written before it, and it unquestionably created "fantasy" as a marketing category. It created an enormous number of Tolkienesque works, using the themes found in The Lord of the Rings.
While fantasists had created fantasy worlds from the time of William Morris, Tolkien's influence enormously boosted them, with a decline of such devices as dream frames to explain away the fantastical nature of the setting. This stemmed not only from his example, but from his literary criticism; his "On Fairy Stories", in which he termed such settings "secondary worlds" was a formative work of fantasy criticism.
The impact that his books, combined with the success of several other series such as C. S. Lewis's Chronicles of Narnia and Ursula K. Le Guin's Earthsea, helped cement the genre's popularity and gave birth to the current wave of fantasy literature.
With the immense success of Tolkien's works many publishers began to search for a new series which could have similar mass-market appeal. For the first time publishing fantasy was looked at as a profitable business venture and fantasy novels began to replace the fiction magazines as the heart of the genre.
Lin Carter edited the Ballantine Adult Fantasy series, when Ballantine pursued the fantasy market; it was so titled to avert its being filed as children's literature. The line contained mostly reprints, but also introduced some new fantasy works. This series reprinted many fantasy works from prior to that time, increasing their influence by bring them to the new writers. The series included works of William Morris, Lord Dunsany, and George MacDonald, and other works: Hope Mirrlees's Lud-in-the-Mist, Ernest Bramah's Kai Lung books, and most influential of all, Evangeline Walton's The Island of the Mighty, the success of which lead to the publication of the other three novels she had written in that series, and to a distinct strain of Celtic fantasy in later fantasy. Another work in this series that was influential for the Celtic fantasy subgenre was Katherine Kurtz's Deryni Rising.
Although many fantasy novels of this time proved popular, it was not until 1977's The Sword of Shannara that publishers found the sort of breakthrough success they had hoped for. The book became the first fantasy novel to appear on, and eventually top New York Times bestseller list. As a result the genre saw an incredible boom in the number of titles published in the following years.
While fantasy has remained somewhat of a niche market, that has began to change in recent years. The long-running series of light fantasies by Piers Anthony (Xanth) and Terry Pratchett (Discworld) regularly hit the bestseller lists from the 1980s onward. Thanks largely to J.K. Rowling's Harry Potter novels, which have become the best selling book series of all time, fantasy is becoming increasingly intertwined with mainstream fiction. The blockbuster success of several film adaptations of fantasy novels such as The Lord of the Rings and The Lion, the Witch and the Wardrobe has helped further this trend.
Today fantasy continues as an expansive, multi-layered medium encompassing many sub-genres of literature; from traditional high fantasy and sword and sorcery, to magical realism, fairytale fantasy, horror-tinged dark fantasy and more.