In the Historical Fantasy sub-genre a part of Earth's history is the setting, but with added fantastical elements. This setting may be set on Earth and positing a question—how would the American Civil War have unfolded if there were vampires?--or set in another world that shares cultural and historical events with Earth.
Historical Fantasy has few limits, which means myths and legends can come to life just as much as historical events. However, fantastical elements are kept in check. The challenge of Historical Fantasy writers is to balance historical facts with modern realism.
Historical Fantasy vs Alternate History
Historical Fantasy is (usually) set in a real historical time (past or present) and includes fantastical elements (magic, etc). Alternate History is set in a historical time period where something about history has been changed or re-imagined. Alternate History may not include any fantastical elements though if it does, then it could be considered Historical Fantasy
Variable. Some stories focus more on the knights errant, while others feature wizard battles. Arthurian Fantasy has a vast repository of books and some have more magical elements and others are more mundane.
Variable. The legends of Arthur have messages and lessons and teach an honorable code of conduct. These are relatively small ideas, but they are the beginnings of bigger ideas. Arthurian tales also grapple with the nature of power, family structures, and education. Although, some tales are more about the adventure of the quest than any grand idea.
Good. Writers have to opportunity to draw on real historical people to create their characters, and even reinvent them. Writers have rich sources to draw from to create their characters and so long as the drawing is balanced, characters are well-developed.
High. Plot is a driving force for Historical Fantasy. The unfolding of events, cause and effect, and the links between events and people are significant to plot and to history.
High. Most Historical Fantasy stories take place during an historical period engaged in strife.
Alternate History. It is exceedingly easy to add fantastical elements to history and thereby alter its course and so sometimes the line between Alternate History and Historical Fantasy is blurred.
Celtic Fantasy. The Celts were historical peoples and so Celtic Fantasy naturally draws from their culture and history.
Steampunk Fantasy. Steampunk is generally set in Victorian or Edwardian times and is a wide interpretation of the Historical Fantasy sub-genre.
Arthurian Fantasy. Modern Arthurian tales will sometimes write the “true” story of Arthur.
By Gene Wolfe. The first in The Solider Series, this novel introduces a mercenary solider who suffers a head injury and develops the ability to converse with the invisible beings that inhabit the world (gods, ghosts, demons, etc.) in ancient Greece.
By Guy Gavriel Kay. Tigana is based on Renaissance Italy. Kay uses Italian politics to make the story seem plausible.
By Emma Bull,. This novel is about American myths: Wyatt Earp, Doc Holiday, and others. Their stories are retold with the presence of magic.
By Susanna Clarke. At the beginning of the 19th century, magic is believed long dead. But, two magicians emerge and just may change England's history.
By Mary Gentle. A gritty, realistic story that is also a part Military Fantasy; set in medieval France.
By Naomi Novik. Aerial combat, in the form of dragons, brings a new dimension to the Napoleonic Wars.
By Katharine Kerr. This series is an example of Celtic/Historical Fantasy and does a wonderful job bringing ancient Welsh culture to life.
By Seth Grahame-Smith. This book stays true to the events of Lincoln's life, but adds in some vampires.
By Stephen R. Lawhead. A series of books set in the 5th and 6th centuries that retells the legends of King Arthur in an historical setting. 10. Takashi Matsuoka, Cloud of Sparrows. Set in 19th century Japan—members of the Okumichi clan have the gift of phrophecy and events unfold to bring an end to the samurai.