Most explanations for the difference between nonfiction and fiction have to do with the reality of the material in nonfiction. Nonfiction is true and fiction is from the imagination. I would suggest, though, that there are a number of other distinctions:
Fiction is a close-in view of life. Think of going from nonfiction to fiction like the process of Google maps as it zooms in from a position in the stratosphere, zooming down into your backyard. And even closer than your backyard, zoomed in to the exact expression on someone’s face sitting at your picnic table on a particular day. It is the close-in view of life. The buttons on a man’s shirt says something about his character that is germane to the story as opposed to an essay on the changing fashions in men’s shirts that may have referenced the same button.
Fiction is focused on emotion. Emotional acuity is probably the most important trait of a fiction writer. Fiction is the only artform that describes the internal thoughts of individual people. It hangs on the ability to describe subtle changes in internal beliefs. Journalism and nonfiction seek to move you to action by giving you information or describing patterns from a higher level -- in the whole city, the whole county, a part of the population, or a social trend. Fiction, on the other hand, wants to transform you, to make you a different person by participating in the emotional journey of someone else, by witnessing the unfolding of an emotional transformation. It doesn’t matter whether the character is real or imaginary: historical fiction focused on previously living people is still fiction.
Fiction actively courts the participation of all of your senses. It is not merely a conceptual or informative piece. Fiction’s goal is to make you feel the dust of the road on your face, to smell the flowers, to not inform you but to transport you.
Fiction’s theme is hidden. The concept or theme that is the purpose of the story is designed to be subtext, to be the hidden wiring, not the lead. The theme is still essential (and frequently overlooked by beginning writers.) Fiction, like all art, isn’t about an event, it’s about the human condition and your unique take on it.