Wainscoting is wood paneling for walls. It's also a term used by F/SF writers to describe a fantasy in which a magical world exists side-by-side or hidden within the mundane world...just as elves might be hidden in the wainscoting of the family manse. It's very common in contemporary fantasy: Harry Potter is a wainscot fantasy, as are Percy Jackson and The Dark Is Rising. The Dresden Files is a good example of wainscot urban fantasy for adults. In the YA classic The Borrowers, the main characters are literally (sorry) in the wainscoting.
By contrast, Lord of the Rings is a "secondary world" fantasy - Middle Earth is its own fictional world, and isn't connected to the real "primary world" at all.
But my two fantasies are very much NOT wainscots. More after the jump-
