With Harry Potter, Twilight and Avatar, I think we've proven fantasy-ish stories can trend mainstream. Sometimes I wonder why more people aren't embracing the fantasy genre, but I think the reason is because all three of these stories are relatable.
Everyone can relate to a kid who lives under the stairs. Who hasn't felt like they're just trying to survive their circumstances? Harry is completely relatable and his accomplishments and mistakes are so well done, it's no wonder a lot of us fell in love.
It's the same thing with Twilight. Who can't relate to high school? I honestly never need to read another story about high school, but Twilight sucked me in.
Avatar is the best movie of all time and what I take away from it is a man learning that everything he's been told is important, isn't. What's most important? Love, family, faith. The core of that story is so raw and powerful, no wonder people connected. They think it was the graphics. I guess we won't tell them Avatar is a romance.
The point is that people will continue to be unsure of words like "fantasy" or "romance" but if we write stories people connect with, the genre won't matter. People will read it.