Literature was born not the day when a boy crying wolf, wolf came running out of the Neanderthal valley with a big gray wolf at his heels: literature was born on the day when a boy came crying wolf, wolf and there was no wolf behind him. That the poor little fellow because he lied too often was finally eaten up by a real beast is quite incidental. But here is what is important. Between the wolf in the tall grass and the wolf in the tall story there is a shimmering go-between. That go-between, that prism, is the art of literature.
Literature is invention. Fiction is fiction. To call a story a true story is an insult to both art and truth. Every great writer is a great deceiver, but so is that arch-cheat Nature. Nature always deceives. From the simple deception of propagation to the prodigiously sophisticated illusion of protective colors in butterflies or birds, there is in Nature a marvelous system of spells and wiles. The writer of fiction only follows Nature’s lead.
Going back for a moment to our wolf-crying woodland little woolly fellow, we may put it this way: the magic of art was in the shadow of the wolf that he deliberately invented, his dream of the wolf; then the story of his tricks made a good story. When he perished at last, the story told about him acquired a good lesson in the dark around the camp fire. But he was the little magician. He was the inventor.
--Lectures on Literature, 1948. More here.