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Urban fantasy is a sub-genre of fantasy that is defined as, “Fantasy narrative taking place inside a city
”. Urban fantasy is often confused with contemporary fantasy which is a fantasy story taking place in a contemporary time setting. They are not at all the same, though many urban fantasy stories are also contemporary and vice-versa, they are not mutually inclusive.
The easiest way to distinguish between urban and contemporary fantasy is that urban fantasy is defined by place, where contemporary fantasy is defined by time. To be classified as urban fantasy, the story must take place mostly within the confines of a city. A story set in a rural Alabama small town could conceivably be considered urban fantasy. The implication though, is that the story would take place in a larger city like Mobile or Birmingham, not in say, Stapleton.
There are urban fantasy stories set in the distant past. They could take place in ancient Rome, Athens, Babylon, Alexandria, or Sparta to name a few. The movie “The Scorpion King” is a fair (but not great) example of this as a large part of the movie takes place in ancient Gomorrah. The movie “Troy” might also technically be considered urban fantasy as it took place in and around the city of the same name. The Iliad, on which the movie was based might also sort of fall into this category. If you look at the graphic novel and movie “300”, you’ll see that it is not in fact urban fantasy as most of the story takes place at the pass of Thermopylae, not in Sparta. There are a lot of short stories written in these and other ancient cities.
There are also plenty of books, movies and other stories set in the not so far past. A large number of vampire stories take place in the Victorian era, in various European, and American cities. London, Paris, New York, Budapest, and various other well known cities are popular settings for supernatural stories set in the 18th, 19th, and 20th centuries. “A Christmas Carol” could be considered urban fantasy of this sort.
It seems to me though that the bulk of urban fantasy is set in more modern times. The Anita Blake Series (St. Louis) by Laurell K Hamilton, The Mercy Thompson Series (Tri-Cities area in Washington State) by Patricia Briggs, the Marla Mason Series (Fictional? city of Felport, and San Francisco)by T A Pratt, The Dresden Files Series (mostly Chicago) by Jim Butcher and too many more to list are all urban fantasy series. The Anita Blake series seems to be especially influential on the genre.
I have not encountered a lot of futuristic urban fantasy that couldn’t be classified better as science fiction. There is a fair bit of anime that could be considered this way too. The Star Wars prequels heavily featured cities and you could sort of classify Star Wars as “Science Fantasy”. The problem is that it’s hard to say where the science fiction ends and the fantasy begins. A lot of stories like this are a melding of the two. You could look at the Matrix like this as it was definitely not hard sci-fi, and had many fantastical elements. The story took place in what I’m assuming was virtual New York in 1998 (Times Square blew up in Revolutions), and the city of Zion in 20X6 (said “Twenty Exty Six”, my way of saying sometime in the unknown future. I think I stole it from Strongbad, who probably stole it from old anime).
Another urban setting is the “fantastical city”. This is when you have a made up city on a made up world that is the setting for a narrative. My absolute favorite would have to be China Mieville’s “Perdido Street Station”. “Elantris” by Brandon Sanderson is another good example. There are countless others and may or may not all be outright classified as urban fantasy by the publishers.
There are a few types of urban fantasy that are better classified as something else, if you are going to bother classifying them as “urban” to begin with. Many vampire stories these days are urban fantasy in the technical sense, but are marketed as “vampire”. Bram Stoker’s “Dracula” is an example I will be using a lot of fantasy with many classifications. It is a vampire novel, but most of the action takes place in the town of Whitby, and parts of it are set in Budapest.
Lots of paranormal romance is in fact urban fantasy. The difference in these sort of genre classifications is a bit arbitrary. Paranormal romance is usually a story where the main focus is the romance of two or more characters. So I guess you could say if the romance is the main focus of the plot, it’s paranormal romance. If the city, the action, and everything else is the focus, even if there is a romance, it would be better to call it urban fantasy.
So in summary urban fantasy is a genre defined by place. An urban fantasy story can fit under many other categories, but need not be contemporary. Nor does contemporary necessarily have to be urban. If you pick up a book that says “urban fantasy” on the back, you’re likely as not looking at a story where the characters do everything they do inside a city, and not a grand sweeping quest over mountain and desert to save the princess.