Fiction literally means something that is untrue and completely imaginary. So Fiction novels are those which have stories with no resemblance to any person, place or incident and are solely a figment of imagination of the author. Fiction refers to a story containing imaginary or made up events. A novel refers to the length of a work of fiction. It's usually considered the longest form of literary prose. Shorter works of fiction would be a novella or a short story. Also, fiction can refer to things outside of writing.