Fiction refers to literature created from the imagination, not presented as fact, though it may be based on a true story or situation. In other words, fiction is not true; it is made up. This includes novels, short stories, and plays that are invented by the author.
However, fiction can sometimes be inspired by real events or people, but the key distinction is that the author has taken creative liberties to alter or embellish the facts. So, while fiction may contain elements of truth, it is ultimately a product of the author’s imagination and is not meant to be taken as factual.
In summary, fiction means false in the sense that it is not a factual account, but it can be inspired by true events or realities.