Mrs Dalloway combines Literary Realism's interest in the small, mundane elements of everyday life with Modernism's ambitious experiments with narration and nonlinear storytelling. In the novel, Woolf is very obviously concerned with presenting readers with an accurate depiction of daily life in London in the 1920s. However, although this interest in small, ordinary events certainly aligns with the tenets of Literary Realism, Woolf doesn't go about exploring the ins and outs of daily life using the conventional techniques of Realism—instead, she uses a slightly experimental, modernist approach to unveil the inner workings of her characters' lives.
Of course, Mrs Dalloway isn't as experimental as other famous modernist novels of the period (like, for instance, James Joyce's Ulysses), but it does make use of stream-of-consciousness narration, which aligns with the modernist tendency to focus on interiority and memory. This, in turn, makes it possible for the narrative to zoom in on the characters' thoughts and the way they perceive the world, creating a heightened and immersive kind of realism that draws on modernist techniques. And though Mrs Dalloway is (like most Realist novels) pretty linear, time itself often elapses quite quickly while characters are lost in their thoughts. In this way, the novel is a good example of Literary Modernism and its interest in emotion and perception over plot and chronology.
