Modern fantasy is a genre of literature that is closely related to traditional literature. The biggest difference is the fact that the books that fall into this genre are not originally told orally. This works are written down by known authors who can be identified, unlike traditional literature where the original author is unknown. While this is the biggest difference, readers of this genre will notice that there are still many similarities between the two. For example, much like traditional literature, modern fantasy sometimes uses talking animals as characters. In addition to this, readers will still encounter magical realms or spells and mythological figures, like gods and goddesses. In essence, modern fantasy borrows from the tales of old, sometimes uses ancient mythologies and folktales to create a new and original tale that may be set in the present or in the past, depending upon the preferences of the author.
Aside from magic, mystical realms, and monsters, this genre is also most remembered because of its "mythological" structures and the monomyth of the hero's journey. As Joseph Campbell pointed out in his Hero with a Thousand Faces, there are often specific archetypes (or symbols/motifs) that arise in this type of literature. In addition to this, the hero in these works of fiction are often called to experience some form of quest where he/she needs to not only reach a goal (or boon), but also develops and learns about him/herself as a character.
The final point to be made about modern fantasy is the role that science fiction plays in the genre. Science fiction is often grouped with fantasy even though it explores scientific concepts in our world versus magical concepts in an imaginary world. To be clear, however, the big difference between the two is that science fiction explores scientific concepts that are in our real or pseudo-scientific based on the technology we have in the world today. It then attempts to illustrate for readers the potential (or potential horrors) of that technology based on the different ways it might be used.