When I speak of the word fairy tale, I don't necessarily mean fantasy as such although certainly all fiction is to some degree a fantasy. Some is a fantasy aimed at being made as realistic as possible to fool the reader into thinking it might actually happen or a fantasy that the reader knows couldn't but is happy to go along for the ride.
When I watch movies, I see some of this same difference. Even the best of them depend on some meaningful coincidences to keep them interesting. If they really were just like most people's every day, who would watch them? We like going along for a ride and with a book, the ride lasts a little longer than with a film.
I've written before about how I consider a really good romance to be like a roller coaster with ups and downs, some whoosh out of the lungs to some quiet moments before it all starts again. There is an element always of suspending reality. Nobody thinks a roller coaster is reality but it's a nice ride to build up our own energy before we get back on the ground and go on with life as it is.
My stories are always set in realistic settings but then things happen that do stretch the imagination. The kind of love that a romance is based upon can require some of that suspension of belief. Although it's a very real sensation and most people have experienced it in the beginning of their own love story. It just doesn't last. A romance takes the reader there again and adds a little adventure possibly that they not only didn't experience but certainly don't want to experience.
Even fairly reality driven romances like Pride and Prejudice have a place where as a reader you must suspend judgement. Darcy is so dramatic and perfect as a hero and yet he starts out rejecting our heroine. Then he does everything he can to get her to become his wife. He's not an average guy doing this but the richest, most handsome man in the realm. Life certainly didn't work that well for Jane Austen.
What I think makes a love story work is to set it in a very realistic environment and then go for the roller coaster, have some fun, and get the reader to suspend their demand for realism in every event which is what the fairy tale driven love story will do.
Now a reality driven love story won't have beautiful people, won't have things always work out tidily. You might get a happy ending but it's the kind people are more likely to find in real life than in a fairy tale. No handsome prince to carry away the heroine to a life of plenty. The reality driven is as apt to end in a boring marriage or even eventual tragedy as it is with a happy ending.
In thinking about a reality driven romance, Bridges of Madison County comes to mind. Now that story is exactly how an affair can and does happen. It has the same complications that reality does bring to love. There is no happily ever after, just a lifetime of thinking of that moment which could be healthy and okay as it gives the energy to stick to a life that doesn't have much romance in it on a daily basis.
In such a reality driven love story, you still have an element of coincidence as that photographer didn't have to stop and ask for directions from the one woman with whom he could fall in love and have an affair. You do not need a happy ending because reality doesn't necessarily hand those out as do fairy tales.
I suppose I could write reality driven love stories. I actually do have one of mine, not yet published, but will be, where the ending is not guaranteeing a happily ever after. They are together but with no certainty that they will find a happily ever after. The story though is full of fairy tale moments; so it still is under the fairy tale type of love story at least in my judgment.
In the end, a writer probably chooses what they want to write based on what most satisfies them, what they most want to read, and what they are willing to spend months or years buried within.