Paranormal is usually set within a contemporary world. The here and now. A world that we as readers know so well that sometimes we can even date a story depending on the small clues in the setting written in by the author. A certain designer that was popular within a certain number of years, a certain landmark or trademark, or even a certain brand name product. For instance, think back to before September 11, 2001. Think of all the things written about New York that had the iconic twin towers. When you see those stories now, you know it was written before 2001 just because of those towers. Paranormal deals with the supernatural within a contemporary world.
Steampunk on the other wheel, is all about the Victorian aesthetic. Under that vein a Steampunk can be set within any time period or on any planet as long as the feel of the setting is similar to the Victorian Era. The society within the Victorian time depends on the country the story takes place in and is imperative to the Victorian aesthetic. Clothing also plays an important part of Steampunk, most of which are one-of-a-kind pieces designed by the wearer. Technology and gadgets are the more inventive, the majority of which bloom from something that was initially invented in that time while being buffed up with steam engines. In some instances the gadgets can be from out modern age but invented and tweaked at a much earlier time.
Steampunk is all about exploring the "what ifs" of the past while Paranormal is about exploring the unknown side of human nature. I'd like to hear from you. What is your idea of Steampunk? Which do you prefer to read and why?