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Magical Realism is a term that lacks clarity, especially in its use in films. This form/style of narration originated in the Latin American literary movement of the 20th century. However, we can find its traces in several other places under different names such as marvellous realism, fantastic realism, and so on. From a layman‟s point of view, Magical realism is an aesthetic facet of art where an ideal realistic setting is interfered with by magical elements in an ordinary form. This study explores the application of magical realism in filmmaking to understand the relative difference in the dynamics of its different facets such as cinematography, lighting, set designs, wardrobe, and the story. For the analysis, the film Pan's Labyrinth (2017) by Guillermo del Toro is chosen as it holds a firm academic backing as a magical realist film of the modern era.