Answer by Matthew Spencer:
Realistic fiction portrays fictional events and characters that can plausibly occur within a commonly accepted model of objective reality. Literary critics, especially of the postmodern variety, will argue whether it is possible to represent reality. But that’s a whole other argument,
Historical fiction is closely related to realistic fiction in that the past needs to be plausibly if not accurately represented, especially if the story is not only set in a historical period but the characters and events within that story have analogs within the actual historical record. In other words, Winston Churchill the character needs to resemble Winston Churchill the man, or at least one of many different accounts of Winston Churchill. Even if a writer is positing an alternate history, those counter-historical events still need to have origins within some commonly accepted view of the past.
So the two categories are not mutually exclusive. Much realistic fiction, including works by classic 19th Century realist authors such as Tolstoy or Balzac, could be considered historical, since they were set in a time period preceding their composition. But neither are the two categories wholly inclusive. Some works of historical fiction, Blood Meridian by Cormac McCarthy immediately comes to mind, have elements of the fantastic that place those works outside realistic narrative strictly speaking, even though actual historic events and people are represented within them.