Eh, I think there's a difference that make both terms useful. Fiction set strictly in the real world with mysterious yet mundane magical/supernatural elements, versus fiction in a fantastical world or a "real world" where the existence of magic™ must be extensively explained.

I think the whole "all fantasy/sci-fi is slop" wasn't that big of a thing in LATAM, so the term isn't some euphemism for making it palatable to elitists.

I also disagree with GP, a lot of what makes One Hundred Years of Solitude good comes from the Colombian setting and it's cultural context. True, it wouldn't be impossible to translate that to a alien planet, Mars isn't fully Mars The Martian Chronicles after all.