Well, yes, and no...
They are certainly fantasy books in the sense that some of the people involved are mythological creatures, such as trolls, werewolves, vampires, gargoyles, golems and goblins. There are dwarfs, and obviously humans, and even Corporal Nobbs of the City Watch, who is less obviously human than most.
There are wizards and witches too. The wizards of Unseen University are, with one famous exception, whose name is Rincewind, capable of performing magic if necessary, but on the whole they prefer eating large meals and arguing. The witches, in general, don't do much actual magic, although they can if they need to. They usually travel on dwarf built flying brooms, which can sometimes be difficult to start, but eventually get them to where they need to be. The witches normally get what they want by using a crafty type of psychology, which they refer to as 'headology', persuading people without them being aware of it, simply because they wear a black pointy hat. There's more to it than that, of course, but that's basically what happens.
The Discworld itself is also a mythological place. It is a vast, slowly rotating disc, carried on the backs of four great elepants, called Tubul, Jerakeen, Berilia and Great T'Phon. The elephants in turn stand on the back of a giant astrochelonian, Great A'Tuin, the World Turtle, sex unknown, who is swimming steadily through space towards the Destination. The sex of Great A'Tuin plays an important part in one of the books in the series, in fact I think it's the first book, 'The Colour Of Magic', but it's a year or two since I read the full series (now a much longer series) so I can't be sure. It's probably time I read it again, so after I've finished reading my latest discworld book, 'Raising Steam', I'll probably start at the beginning once more.
The Discworld, being a rotating disc rather than an Earth-like sphere, has four directions of travel, doing the same job as our North, East, South and West, but in a completely different way. On the Discworld you can go Hubwards (towards the centre of the Disc), Rimwards (towards the edge of the Disc), Turnwise (in the direction the disc is turning, like our East), and Widdershins (against the turn of the Disc, like our West).
OK, so we can see that the setting and characters are works of fantasy, or are they? The Great Elephants idea came from Hindu mythology, and yes, that idea does seem rather fantastic. The various species of 'people' that inhabit the Discworld, however, are, in the way Terry Pratchett presents them, nothing more than humans of different races or nations. The dwarfs, for example, are people who spend their lives living and working underground, and could represent any mining nation or group, such as the miners of Wales or Yorkshire.
In the Discworld series, the differences between the various species are treated in exactly the same way as the differences between people of different races, colours, sexual orientation and religions are treated in the 'Real World'. Each Discworld race has its own likes, dislikes and prejudices towards the other races, just as we do, and Terry Pratchett uses those different characteristics to produce totally realistic interactions between his characters. It's perfectly possible to have bad humans and good trolls, goblins and vampires. They are all just people, but with very interesting variations, such as in the case of Sergeant Angua of the Ankh-Morpork City Watch. She is a werewolf, and can run very quickly in her wolf form, but is of course stark naked when she changes back to her human form, so she always has to carry her clothes in a bag gripped in her teeth when she is in wolf form. Naked police officers don't usually have a great air of authority. The books are full of these quirky little details.
The Discworld is basically a medieval world, but gradually over the series it starts to mimick progress in our world. Photography, Rock music, the Clacks, and steam railways are among the many new wonders that appear one by one as the series goes on.
There are several 'strands' or 'threads' running through the series, such as the wizards, the witches, the City Watch, the vampires, Death (the character), and the Nac Mac Feegle, a race of six inch tall, hard drinking, rowdy, argumentative people who speak uncannily like Scotsmen. Each book is a standalone story, but the various threads and characters weave in and out of the stories, and you tend to meet most of your old friends in each book. Not everyone likes every thread, but there's usually something good in each book. Personally I'm not madly keen on the Nac Mac Feegle or Death threads, but I really enjoy the City Watch and witches threads. Somewhere in the series there should be something to suit just about everyone.
Currently there are 40 books in the Discworld series, and I have the full set. Another, 'The Shepherd's Crown', is due to be released posthumously in 2015. It's in the Nac Mac Feegle thread, with its usual heroine Tiffany Aching, but perhaps I'll find I enjoy that thread more when I read them all again this time. There are also many offshoot books related to the series, and I have most of those too. I have a lot of reading to do over the next few months. Why not try one or two yourself? There's a whole new (Disc)world out there waiting to be explored.