This is Disney's version of "One Hundred Years of Solitude".

This is what I found in the IMDb trivia section.

Set in Colombia, the film contains several nods and themes of magical realism (a literary genre using magical elements in ordinary settings) typical of the works by Colombian writer Gabriel García Márquez (indeed the phrase "magical realism" was coined in an effort to describe Marques' work). An example is in the trailer, where the fairy dust sparks in the Disney logo is changed with yellow butterflies, a recurring theme in Marquez 1967 novel "One Hundred Years of Solitude".

Some of the artistic and story elements draw inspiration or pay homage to two classics of storytelling: the book 100 Years of Solitude by Gabriel García Márquez, and the film Open Your Eyes (1997) (Abre los Ojos in Spanish). The book tells of generations of a family who live in a strange village isolated from the larger world after violence forces its founder to flee their original home.

Mirabel is revealed to share a birthday with Gabriel García Márquez.

https://screenrant.com/encanto-movie-mirabel-birthday-march-6-gabriel-marquez/

And again, it is hard to not see the similarities between this movie and his novel:

Encanto’s setting and plot have a resemblance to García Márquez’s best-selling work One Hundred Years of Solitude. The novel depicts Colombia in the early 20th century, and while Encanto’s exact time period is purposely left vague, there are technological and historical clues that pinpoint the film’s similar setting. Both stories show the life and struggles of multigenerational families led by their matriarchs. The stories also occur inside or near the houses, with the sentient Casita providing the Madrigals with their needs and the Buendía’s home being the setting of the novel’s latter half. Lastly, and perhaps the most noticeable reference to García Márquez’s magnum opus, is the prominence of yellow butterflies in Encanto. In One Hundred Years of Solitude, yellow butterflies constantly follow Mauricio, and this motif is later on adapted by Encanto as a signifier of magic, change, and hope. In fact, it is seen in several aspects of the film. Mirabel’s outfit in Encanto has a butterfly pattern detail, the miraculous candle is also adorned by a butterfly design, Abuela Alma and her family's reconciliation is marked by a yellow butterfly, and the Academy Award-nominated song from the film, “Dos Oruguitas,” narrates a romance between two caterpillars waiting to become butterflies.

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Here's a new article, where the connection with Garcia Marquez is mentioned:

https://paktv.site/encanto-why-there-are-so-many-butterflies/