A fantasy where there is some sort of “urban mentality” (i.e., there is some kind of community with an inward drawing force, a central hub that draws lots of attention), with creatures or elements drawn from folklore and mythology that we have some familiarity with, and most importantly a combination of the fantastic and the mundane. Generally urban fantasy makes the fantastic mundane, although in some cases the mundane is made fantastic.
But really, I think it would be completely legitimate to call something an urban fantasy even if it took place in a completely different world. As long as it was recognizable as this "urban mentality", then we can accept it as urban fantasy. I mean, Blade Runner is on an Earth so distorted and different that I wouldn't consider it "modern" or "contemporary" or a "real city", but if it had had fantastic elements instead of sci fi, I would consider that an urban fantasy.
So yeah, I think it's just important that the fantasy have that kind of mindset. Of course defining the "mindset" is much more difficult than defining a "real city". But I think that Mendelsohn starts to get the idea, with her description of it being a kind of "inward force". I think someone in discussion also was right in saying it has to do with advanced society (technology is one such manifestation, but I think that any kind of advanced tools/problem solving), and some kind of internal system of rules or hierarchy that only exists inside the city-like area (whether it's The Hollows, the mining town, or The Market).