Oh man, do we have to? Okay, here we go again.
SF has utterly nothing to do with post-industrial technology. It's perfectly fine for fantasy stories to be set in modern, post-industrial settings. I.E. if China Mieville or Neil Gaiman throw a computer into their stories, that doesn't make it a sf element. SF are stories of imagined realities that involve science and technology that does not, at the moment, exist. It may be science and technology that may one day exist (such as what happened with cloning,) partially exists (nanotechnology, space travel,) or that is unlikely to ever exist (Spiderman.) SF stories may be set in the past, the alternate past (German wins WWII,) the present or the near or far future. SF stories may be set in a post-apocalyptic future where science and technology have had a set-back (don't exist as they do now.) SF stories may use such devices as psychic abilities, time travel, vampirism, animal imprinting, and alternate dimensions as long as there is a scientific basis for them, however flimsy, and they remain sf stories, not fantasy stories. A story in which people on a giant spaceship don't know that they are on a giant spaceship is still a sf story.
A fantasy story does not have to be about a quest and does not have to have a hero. It does not have to have cute animals, elves, dragons, wizards, dwarves or any other concept that may be commonly used in fantasy stories. It is a fantasy story because it is an imagined reality in which the fantastic occurs -- things that are caused by magic, the supernatural or who knows what -- things which do not exist in reality and which are given no scientific basis for existence. Fantasy stories can be set in any time and in any place, including imaginary worlds and the near or far future.
Now, I haven't read Swordspoint and I don't know what the deal is with it. I'll take your word for no magic, but I would then normally expect there to be some sort of supernatural, psychic, or unexplained elements to it, or something about the structure or existence of the alternate world that is fantastic in nature. Perhaps someone else who's read the work could provide more info.
Magic realism is a form of literature that has been around a long time, just as fantasy fiction has been around long before there was ever a fantasy genre. (In most countries of the world, there still isn't a fantasy genre market and they must think we're crazy to discuss this stuff.) It is a realistic story in which something magical and unrealistic occurs, such as a man waking up one morning to find he's a giant cockroach. It is a fantasy story. Most magic realist authors, however, are not published by fantasy genre publishers specifically for the fantasy genre fan audience. Genre authors are published by genre publishers for fantasy fans. Non-genre fantasy authors are published by non-genre publishers for a mainstream, general audience. Sometimes they mix and they're doing it more and more. Susannah Clarke, for example, a non-genre fantasy writer, seems to have actively marketed her novel to the genre fans.
Margaret Atwood writes stories that are sf, fantasy or neither. Her dislike of being called a sf author is because she does not write only sf and because she does not want potential readers to view her as being part of the sf genre, which is a small, specialized market that she clearly doesn't value. Given that most of her very large fan base are not sf fans, this does make a certain amount of sense, even if we don't like her attitude about it. Obviously, no one has really explained to her what "speculative" means in the industry.
Pullman, because he'd published children's fiction before, had his bestselling series published in children's, instead of in adult fantasy where it belonged. The market audience for children's fantasy is larger than adult fantasy, as it is not a specialized niche market, so that worked out pretty well for him. Pullman has also gotten aclaim from genre fantasy and the children's field, but he wants bigger mainstream audiences and a chance at mainstream literary prizes. So he's trying to disassociate himself both from the fantasy genre and from children's fiction. It would make more sense if he just wrote something else and went and got it published by Knopf or William Morrow in the U.S., but you'll just have to forgive him for being cranky.
The fantasy and sf genre markets offer authors a direct crack at the readers most likely to buy them, but it can also mean difficulties marketing to non-genre readers, causing authors to defect from genre publishing. As non-genre sf and fantasy authors do well and as the SF/F genres become bigger and more popular, this becomes less and less of an issue. But that won't stop authors from whining about it.
