Magical realm
An individual's magical realm is the domain of their sexual fetishes, especially in relation to roleplaying games. When a game starts developing or introducing elements of the player or GM's fetishes (either deliberately or accidentally), it could be said to be entering that individual's magical realm (or that the players/party are doing so). The original context it derives from is that of a GM (or /d/M) specifically creating or introducing elements to the game to satisfy his sexual fetishes - for instance, a GM with urolagnia (a urine fetish) describing a strange realm of piss trees or introducing NPCs that demand to be pissed on or try to piss upon player characters. When the players identify and refuse to go along with this obvious fetish fulfillment, they can be said to be refusing to enter the GM's magical realm, and so forth.
The origin of the slang is a Gunshow comic by KC Green called "Piss World", where the players of a tabletop RPG react violently to their GM continually trying to get them to play to his piss fetish, and specifically a panel where the "Whizzard" asks "dare you enter my magical realm?"