Ask five people what defines a particular subgenre and you are likely to get five different answers. It is subjective by its very nature, and therefore gray. So, when reading my definitions, please keep in mind these are my personal definitions, and are what I am personally looking for.
Contemporary fantasy for me is set in the here and now; this world, this time. The world should be easily recognizable as our own, but with fantastical elements worked in. You can have magic, or not, beasties, or not. Examples are: Practical Magic, American Gods, Freyja's Daughter, Lost, the Iron Druid chronicles.
What makes it different from urban fantasy? For me, urban fantasy is typically set in a city, and has the same main characters/couple throughout the series. But that last bit isn't a hard rule (such as with the Iron Druid chronicles and Freyja's Daughter). The setting is more of a definer.
So when I say I am looking for contemporary fantasy what am I personally looking for? A great fantasy novel set in the here and now with deep world building that may or may not involve magic, or supernatural creatures or elements, but will at least have some fantasy. The rules of this world ~so like ours, and yet not~ should be well defined and developed. It may take place in a small town, or even in the middle of nowhere.
