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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
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