If your friend says she is going to fly on wings made of wax, you might tell her to "be realistic!" What you mean is, "In the real world, that is not going to happen."
While you might really want to go to an Ivy League college, it's probably more realistic to apply to state schools if your grades aren't that good. A movie can be called realistic if it seems to represent life as it is. Do you ever wonder if reality TV is more realistic than scripted television? The jury is still out on that, but most people agree that if you're being realistic, what matters most about a TV show are its ratings.