This is kind of analogous to photorealism versus cartooning. A history or biography would attempt to adapt events and experiences directly to the page: "this happened, and then this happened, and it felt like that". Fictional work transforms those same elements into exaggerated characters and scenarios. Both kinds of works require some creativity to build up a coherent story, but fiction has a freer hand to manipulate elements and choose its focus.

Just making it up without adapting from anything real usually isn't something that good fiction is built up from, though. That path goes directly to cliche, and it's easy to find cliched fiction.