Fantasy writer Lev Grossman wrote an article for the NY Times (read it here) in which he talked about how becoming a fantasy writer unleashed his creativity. He found his writing voice in the magical world.
Literary critics probably won't acknowledge that even the grandest fiction is, in a way, fantasy fiction. In order to create, writers go to a special spot in their imagination and it is from that place that their stories emerge.Whether writers create a town withering in the recession, send a boat down the Mississippi River, or fill a land with dragons, we mentally live in that world while we write about it.
I write murder mysteries. My heroine, Kyle Shannon, does not have physical form but she is very real to me. As I move her through the story, I fantasize about her. I feel her emotions. I hear her voice. I am aware of her hopes and dreams. What happens to her, happens to me, and then to my readers.
In creating Kyle's world, I examine my own. What she experiences is distilled from what happens around me. The great thing about being a fiction writer is that Kyle isn't bound by the constraints of the real world. She can survive on temp jobs. She can go places I would never go and she can know people I am not likely to meet.
No matter where a story is based or how the hero moves through it, fantasy plays a role. Relationships, wants, and needs form the centerpiece of all plots no matter where the story is set. A woman solving a murder, an explorer on Mars, or boy waving a wand each face a challenge and must somehow overcome it. The genre is where the writer finds a home but all fiction is fantasy and all writers live in a fantasy world.