It's not some carefully crafted story; it's a mess and we're all gonna die.
If you saw a movie that was like real life, You'd be like, "What the hell was that movie about?
It was really all over the place."
Life doesn't make narrative sense.
Somebody thought they were protected by the power of narrative convention. Then reality ensued.
By definition, fiction is unrealistic. But most of those who indulge in media don't ask for their stories to be completely like reality. As long as things are kept internally consistent, an audience is willing to go along with just about anything an author can create... no matter how irresponsible, immoral, or unhinged their more likeable and sympathetic characters might be acting by the standards of Real Life. For that reason, a creator can sometimes ignore or Hand Wave consequences of the real world in their stories. This trope, though, is about what happens when a creator chooses not to ignore said consequences, and even factors them in as part of the plot or events.
This can sometimes be seen on the hard end of the Sliding Scale of Idealism vs. Cynicism, though it isn't necessarily so since realism, despite what many claim, is not the same as cynicism. There are many realistic stories that run on optimism.
Generally, this trope is not used in order to make fiction completely and entirely mirror mundane everyday life... except when it is. This is also surprisingly often used as a Comedy Trope. Contrast Fantasy All Along, when reality ensues and immediately afterwards fantasy kicks in again (occasionally undoing the damage done by the "reality" moment).
Note that, when we say "reality", we mean reality as in Real Life. We have "X happens" and "Y happens as a consequence of X"; the Y must not involve the fantastic in-story aspects of the work's own universe. For realistic consequences of unrealistic superpowers, see Logical Weakness.
Not to be confused with Hilarity Ensues, although when done right, the two can and will overlap. Still, do note that this is not strictly a "humor" trope: the defiance of a fantastic element can be a pretty powerful tool for deconstructive drama and sometimes even horror.
Characters who use this to their advantage almost invariably are Genre Savvy. A Wrong Genre Savvy character has chances to be hit hard by an Ensuing Reality. The No-Nonsense Nemesis runs entirely on this trope played for drama and sometimes horror. Violates No Ontological Inertia when things do not automatically change because one thing comes to an end.
Since this trope is entirely about outcomes happening under the rules of Real Life, real life examples would be redundant. If you want more detailed information on this, see Television Is Trying to Kill Us, a detailed list of why many different fiction tropes would not only not work out well in real life, but will end in disaster for anyone who actually attempts to do it.
Warning: As this trope frequently occurs at the climax of a work, spoilers are likely to be unmarked. Caution advised.
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