A term taken from the tv series The Water Margin, where it describes the unmapped and ultimately unmappable regions which surround a central empire, a vast Polder whose rulers attempt to stave off, by the use of Magic and treachery, various revolutionary incursions from the Heroes who inhabit the unknown regions. WMs surround a central Land or reality, and fade indefinitely into the distance, beyond the edges of any Map. Fantasies set in Secondary Worlds are commonly supplied with maps whose edges are not Borderlands but WMs.
Fantasy itself has several times been described as a fuzzy set – as a grouping defined not by boundaries but by central examples (see Brian Attebery). In the "darkness" surrounding this fuzzy set can be found various regions – impossible to fix exactly – into which the genre called fantasy does not really extend. Stories told for children too young to distinguish reliably between what is real and what is "fantasy" are an example, as are much Folklore, many Myths, many Taproot Texts, much Science Fantasy and Science Fiction, the further reaches of Supernatural Fiction and Horror, and Magic Realism. The list of texts which marginally escape easy definition as fantasy, even with the remit of the fuzzy set, is very extensive.
Such texts can be described as inhabiting the "water margins". The term is used as a tool of perspective, from within the point of view of the fuzzy set of fantasy as a field, and not prescriptively. Of course, from the perspective of other fields of fiction, fantasy may itself legitimately be deemed a water margin. [JC]