Toby, are you thinking that the Gormenghast trilogy is basically magical realism? (We've got so many different conversations going on that I think I may have lost track.)
If so, I would disagree. All of the stories that I have read that were clearly designated as magical realism (which isn't a whole lot), the supernatural impinged somehow on an otherwise utterly mundane and realistic setting, like a choir boy growing wings, or a shop assistant turning out to be a witch, and everyone keeps carrying on as though nothing unusual had happened (though it clearly had).
In Gormenghast, there is no influence of the supernatural, but it's the setting that is utterly fantastical (except for the part in the boys' school, which I take it is fairly realistic).
I will agree that whatever one wants to call it, looking for logic or internal consistency in any of Peake's work is perhaps missing the whole point.