It is incredibly tough to generalize about things like this, because it can change on a film to film basis.
However, generally speaking, the Spaghetti Westerns were (are) MUCH more realistic than most of their Hollywood counterparts.
But, their realism, or perhaps historical accuracy, was relegated to chiefly visual aspects and characterizations.
As Lindberg has pointed out, the towns in Spaghetti Westerns are more realistic than the average “old West” town you would see in a Hollywood film.
The attitudes of the people, or characters, in SW’s are absolutely more real than the average “code of the west” or “manifest destiny” types you see in a lot (not all!) American Westerns (pre-1967).
And the Spaghetti Westerns definitely deserve higher marks for their costuming! Old West historian Bob Boze Bell (editor of True West magazine) has told me several times that up until the Leone films came out, the costuming in Westerns was somewhere “between almost right and ridiculously wrong”. Once Leone hit the scene with Simi’s more period authentic costuming—Western movie clothing was, happily, never the same.
So, the Spaghetti Westerns might not be “realistic” from a story standpoint, or an action standpoint—but, more often than not the “universe” in which these unrealistic events occur is rooted in enough realism to make the occasional incongruencies more than palatable.
My favorite example of what I mean by all of this is Corbucci’s DJANGO. The film has highly realistic, period authentic costumes. The town is an incredibly accurate depiction of a true old West town. Most streets of actual old west towns were seas of mud (hence boardwalks, etc.). The mud was not always due to weather conditions, by the way, it was really due to a combination of animal urine (horses, cattle, mules, donkeys, etc.) and other things. Some towns had crews that went around putting down water, and sometimes even oil, in an effort to keep dust down.
So, we have realistic costumes and sets…but, then there is the classic scene where Django whips out the Spanish Civil War era machine gun out of his coffin and mows down a slew of Major Jackson’s Klansmen! That scene is, indeed, brilliant…but, it encompasses all of the delightfully unrealistic elements at work in the film. The coffin as a means of transporting one’s belongings isn’t very realistic, or practical, but it is cool as hell! A machine gun like Django uses would not be invented for at least another 30, maybe even 40 years, after the period of time the story takes place, and so on.
But, it is the mix of the real and unreal that makes films like DJANGO so marvelous!
Oh…and I wanted to mention that the Spanish locations do, indeed, provide very real substitutes for Arizona, New Mexico, and even Mexico. Christopher Frayling has said that Almeria looks nothing like Arizona; but, he is ridiculously wrong! I live in Arizona and I have been to Almeria many times—and they are much more alike than they are different. I think the only places in Arizona that Frayling has been to are Phoenix and the Grand Canyon, and maybe Tucson. He has undoubtedly never been to the area around Yuma or even here near Tombstone or he would never have made such a stupid statement.
Also, many of the Italian locations used in SW’s look reasonably like parts of Texas, Oklahoma, Missouri, and Colorado.
There are no films, American or Italian, that get it 100% real every time; but, why would any film fan want it that way in the first place?
If you want 100% realism—well, you shouldn’t be watching movies.