What is the key difference between magical realism and fantasy?

Very briefly;

Science Fiction is an extrapolation of known techniques and physical principles. No fundamental breakthrough's are required or involved though the technology is beyond us at present.

Fantasy on the other hand demands things such as super photic speeds, warp drives, matter transportation, incredible ESP or super powers etc. Many fantasy stories do not hold to physical, chemical or biological principles.

This, is of course a very rudimentary explanation and the lines between the two genres are often very blurred.