When my husband read my post about our puppy, Oscar, he asked me, "Is that really fiction?" Good question. Oscar was real. Oscar was hit by a truck. I had to think about that for awhile, but ultimately I decided the piece I wrote should be considered fiction. I attributed traits to Oscar which he may or may not have had. After all, do I really know he thought of himself as big like the others? No, so I made that part up - fiction. Do I really know it never entered his head that he was too small for the truck to see him? No, that too is fiction. When I watched him play, I imagined he would feel and think these things, but there is no way I could possibly know what went on his little doggy brain.
Fiction is many times made up of reality. We, as writers, are often told, "write what you know." At times what we know is based on research. Other times, it is based on what has actually happened in our lives. We may have to change names, alter descriptions, or recreate dialogue, but we use what we know to write our stories. It's amazing where stories can be found. The trick is to be able to see them when they present themselves.