Traditional stories, or stories about traditions, differ from both fiction and nonfiction in that the importance of transmitting the story's worldview is generally understood to transcend an immediate need to establish its categorization as imaginary or factual.
Different Types of Traditional Stories
An anecdote is a short and amusing or interesting story about a biographical incident. An anecdote is always presented as based on a real incident involving actual persons, whether famous or not, usually in an identifiable place; whether authentic or not, it has verisimilitude or truthiness.
A fable, as a literary genre, is a succinct fictional story, in prose or verse, that features animals, mythical creatures, plants, inanimate objects, or forces of nature that are anthropomorphized (given human qualities), and that illustrates a moral lesson (a "moral"), which may at the end be expressed explicitly in a pithy maxim.
A fairy tale is a type of short story that typically features folkloric fantasy characters, such as fairies, goblins, elves, trolls, dwarves, giants, mermaids or gnomes, and usually magic or enchantments. However, only a small number of the stories refer to fairies.
A legend is a narrative of human actions that are perceived both by teller and listeners to take place within human history and to possess certain qualities that give the tale verisimilitude. Legend, for its active and passive participants includes no happenings that are outside the realm of "possibility", defined by a highly flexible set of parameters, which may include miracles that are perceived as actually having happened, within the specific tradition of indoctrination where the legend arises, and within which it may be transformed over time, in order to keep it fresh and vital, and realistic.
In the field of folkloristics, a myth is defined as a sacred narrative explaining how the world and humankind came to be in their present form. In a very broad sense, the word can refer to any story originating within traditions.
A parable is a succinct story, in prose or verse, which illustrates one or more moral, religious, instructive, or normative principles or lessons.
A tall tale is a story with unbelievable elements, related as if it were true and factual.Tall tales are often told so as to make the narrator seem to have been a part of the story. They are usually humorous or good-natured. The line between myth and tall tale is distinguished primarily by age; many myths exaggerate the exploits of their heroes, but in tall tales the exaggeration looms large, to the extent of becoming the whole of the story.