The medieval fantasy setting is definitely linked to the word RPG - I would be tempted to add 'unfortunately'. I would say by definition, people immediately think of RPG when you say the words 'medieval fantasy' and vice versa.

The main reason is probably a cultural legacy from the very first RPGs and CRPGs that were both inspired by Tolkien's books and their medieval fantasy setting - I'm thinking of Wizardry, Ultima, Bard's Tale... Since that time, very few have managed to break the rule; it seems that both customers and developers are very conservative about it. After all, medieval fantasy is a setting people feel confident with and can always relate to. Everybody knows that a goblin is a little arrogant coward that will try to fool you. Everybody knows that a dragon probably hides a nice treasure in his backroom, and everybody knows what a teleporter does. There's no need for explanations.

Obviously, it would be interesting to define CRPG better. I bet we'd come up with one definition per gamer, and that could be a very interesting discussion. Personally, I'd say CRPGs are games that make me forget about myself and manage to drag me into a character's story, the key elements being immersion, freedom in the way I want to play, high level of interactivity, emotions and sense of vulnerability. Very few games manage to do that to me; for me, an RPG doesn't necessary have to feature the usual cliched tons of stats, billions of different weapons, infinite level of character customization and progression - all this in an endless med fantasy open world with thousands of sub-quests.