Realism admits of many meanings, a good chunk of which are relevant to the writing of literature.
Realistic touches, for instance, which are telling details that add life to the story. The cat, even if neon purple and a familiar, basks in the sun and likes fish. (I note that grime, garbage and blood can be used for realism in this sense, if the situation is appropriate, although as with all such details, selection is important.)
Or it can mean mundanosity. The ordinary stuff of quotidian life. This doesn't even have to shade into fantasy to be lessened. Action, adventure, unusual people doing odd things for uncommonly high stakes can be called unrealistic under this rubric. Jane Austen's particular genius was making great stories containing nothing more dramatic than a few off-stage elopements, and one off-stage duel without consequences. (One reason she's so hard to emulate is that genius is rare.)
Or it can mean the story, characters, and setting all fit together the way events, people, and world all really interact. More or less. You sometimes need some clutter to convince, but you need events to follow each other with cause and effect, you need characters to react to events as real people would react, you need a world where the rules more or less are clear and where unclear or inconsistent, appear to have a meta-rule that justifies them. Where backstory explains why the characters act as they do, and when they change, they have adequate motivation.
Or -- it can mean it portrays life as it is. Life as it really is in general. Aristotle observed long ago that history deals with the oddities, and fiction the typical. Scads of people who have never heard of Aristotle adhere to this theory, mostly obviously when a character is not entirely favorable and a member of group X, and you get screams of outrage at how group X is not like that in general. It has a more general application, though, with people thinking, for instance, nothing is unrealistic without doing justice to the unpleasant side of life, in spite of life being not unvaryingly unpleasant, or a Gloomy, Depressing work work being praised realistic, or a hero being heroic being denounced as unrealistic. This one gets fun because it depends on your view of life.