About.com defines a fictional work by its author’s primary use of imagination and invention in its storytelling. Non-fiction differs in that it presents its content as a direct and verifiable account of people, places, objects or events that actually happened.
Though fiction and non-fiction are both capable of telling the same story, they must go about it using different writing techniques that determine whether or not what’s being said actually happened, or whether the author is inventing the situation for the purpose of his own narrative.
A non-fiction work will frequently cite primary documentation like diaries, newspapers, direct testimony or any kind of account that can contribute to the author’s work that also qualifies his work as an objective presentation of events.
Fictional works can do this too, and overlap between both genres is possible, though the primary concession behind a work of fiction is that it is a story that is made up and has no pretense to be representing real people, places, things or events.