Modern fantasy has increasingly taken the war between good and evil away from elves and orcs, staging it instead within an individual's skull.
I am often asked by bloggers to offer words of 'wisdom' on the direction in which fantasy is heading. I refuse the question, like a horse before a ten-foot fence. I'm not a student of the genre - I read too few books to have a decent sample of what's going on. I'm not even sure that fantasy is heading in any discernible direction. It's more like a forest fire, advancing on many fronts, accelerating along some avenues only to burn out, sparks flying ahead to start new infernos in separate areas.
Any claim in this area can immediately be shot down with a barrage of counter-examples. The success of one type of fantasy doesn't mean that another is not still being written, not still being read.
However, my statement at the head of this piece seems to me to be broadly true. There seems to me to be an increasingly sophisticated approach to the ever-present goodies vs baddies theme. That certainly doesn't mean that you can't find books that did exactly this twenty or fifty years ago, or that you can't find a popular book published last month that pits the golden hero against the born-bad race. But on the other hand, it seems to me with my limited perspective to be one of the few generalizations you can make about the direction that the genre has been headed in and may well continue to head in. A generalization sharing the weaknesses inherent in generalizations (he generalized).