Luke Hider answers:
Fantasy, what is it? I suppose I can try and put this as formally as possible. Fantasy is a mind blowing experience that grips you by the cerebral cortex and sends shivers down your spine. Fantasy is the ideas you get when just shittin' around with your friends, or when wondering whether Legolas or Drizzt would win in a fight. In short fantasy is the coolest part of using your imagination, and should be respected as such. Of course fantasy can be defined in a more academic nature, and this can be qualified by looking at some of the more prominent authors of the genre.
When talking about defining Fantasy the first name on anyone's list would be Tolkien. As to not gush over his numerous qualifications as an expert I will just clearly state that the man reinvented the genre on a mainstream level. Taking shoe-making elves, making them grow five feet, giving them amplified everything, and arming them with deadly skills in just about every way you could want to kill someone. Point being, Tolkien had some pretty badass ideas, case closed.
In order to see what Tolkien defines as fantasy we need to take a deeper look into his characterization. Since I have already started to discuss characters in fantasy I think its safe to say a fantasy novel needs these certain "beings." Not to limit yourselves to dwarves, elves, wizards etc. but that there should be some mythical aspect to your characters. If you want to give your dwarves wings with lasers shooting out of their eyes, then by all means. Or perhaps make up your own character that has four legs, four arms, spits venom, and drinks coffee! This is part of the beauty that makes fantasy so enticing to readers.
Arguably the most important aspect that defines fantasy is the setting that its taking place in, or rather the world built around your characters. In order to demonstrate this you can refer to Tepper's work in King's Blood Four. Tepper had a rather unique idea when building her world, which was to make it almost entirely opposite of our own. But she takes it deeper and looks at the infrastructure of our world, the laws and morals that govern us and makes this new world spit on such things. At first you want to reject such a wildly inappropriate concept, but after a while it becomes your guilty pleasure. It's unique ideas like this that make up the majority of what fantasy is. Without a rare world to build inside of, your fantasy story cannot go far.
Listed above are only two of many, many parts of a whole. But if fantasy is what it's supposed to be it will be forever changing and challenging our imaginations. The day I can wholly define fantasy may be the day the genre has died.