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Magical realism as a genre is often associated with Latin litterateurs who, like Gabriel Garcia Marquez, make good use of the richness of their native tongue to produce powerful parables, and situations of a dissociative nature which allow the reader to create a metaphor or allegory on their own accord.
An example of magical realism in Chronicle of a Death Foretold is the importance placed on symbols and premonitory dreams as factual pieces of information. The fact that these symbols help to guide the plot of the story lead us to understand the important role which they play within it. Also, the disguising of the brothel when it is described as a form of magical place whose scent and strange elegance invites the reader to wonder what kind of place it actually is happens to be an instance of magical realism. It is as if something surreal was in the atmosphere taking the place of what is actually there.
These forms of allegory are similarly exposed in One Hundred Years of Solitudewhere we encounter the character of Pilar Ternera, for example, whose specific "scent of smoke" seemed to hypnotize her lovers and rendered them weak in her presence.
Therefore, you could argue that magical realism is, in a way, a form of existential literature with less depth but more allegorical content, and Marquez is the absolute conqueror of this type of genre.
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