Star Wars seems pretty ''Fantasy'' to me. Just look at all the weird races that exist in the Star Wars universe. We even have genuine dragons and ''magic'' wielding swordsmen.
I think he is referring to the Sith as a dominating faction, not as Galactic rulers per se.
Think about it, the Sith were a joke around the time shortly before EP1, they were almost forgotten by the everyone, except the Jedi.
I don't -hate- the prequels, I still have alot of fond childhood memories about them (I am talking about Episode I primarily). I simply think the old movies are superior. If anything, the prequels retconned alot of lore for unnecessary reasons.