Faction incorporates researched historical material into an imaginative reconstruction of the past. Or, if you like, you can look at it from the opposite perspective; it adds imagined events into the framework of received history. Which perhaps accounts for its popularity over formal academically generated accounts of history, because it enriches what actually happened in a manner that dispenses with footnotes or appendices.
Faction isn’t quite the same as realism. It’s not that easy to offer an definitive explanation, but if pressed, I’d say faction is more “knowing” of its artifice, and is a tad more relaxed about it. The realist, at base, wants to inform; the faction writer is more in the business of entertainment, and perhaps lacks the social imperative or agenda that tends to motivate his realist colleagues.
The development of faction can be traced back through literary history almost indefinitely; I suppose you could say ‘Antony & Cleopatra’ falls within a broad definition of its ambit. But we can certainly look back at the historical romances of Sir Walter Scott or the works of Tolstoy as being the major influences on what is currently a crowded genre: in the UK, there’s Beryl Bainbridge’s account of Dr Johnson, ‘According to Queeney’, or anything by Robert Harris; Australia can boast Peter Carey’s ‘My Life as a Fake’ that we’ve just been discussing;  in the United States, there’s Gore Vidal’s masterful disquisitions on American history and Truman Capote’s seminal dissection of crime and punishment ‘In Cold Blood’; and in Colombia, Gabriel Garcia Marquez’s gripping account of the drug wars, ‘News of a Kidnapping’. All good, all faction.
Now is not the time or place to examine the philosophy of history; that would require a whole other book entitled ‘How History Works’ - and EH Carr got there first anyway. But the relationship between literature and history is discussed at considerable length in the second Epilogue Tolstoy added to one of the greatest novels ever written, ‘War & Peace’, which gives takes a long, hard thoughtful (and thought-provoking) look at the deficiencies of “modern” historical narrative. And since its implications impinge somewhat on our own musings, a brief summary will be quite useful here.
Like the novelist, the historian is engaged in making sense of reality - he’s just as much an interpreter of it as his literary counterpart, in that both disciplines involve beating a path through the available material. Some choose to follow a well-trodden route, others decide to hack through virgin territory. But that’s where the similarity between these two groups of storytellers ends, and Tolstoy’s lifelong beef with history has several points of conflict between how he envisages it should be written, and how it tends to emerge (and please bear in mind that Tolstoy’s main target is historical texts written in the middle of the 19th-century, before the era of social or even cultural history had really dawned):
 
First, there’s the source material itself: the historian rarely casts his net wide enough:
 
History is nothing other than a collection of fables and useless trifles messed up with a mass of unnecessary dates and proper names....Why should any one have to know that the second marriage of Ivan the Terrible to the daughter of Temryuk took place on August 21, 1562, or that the fourth to Ann Alekseyevna Koltovski happened in 1572? Yet they demand that I learn all this by heart, and if I do not know it, they give me a ‘one.’ [i.e., a low grade]
 
That’s the young Tolstoy complaining that history isn’t just about kings, dates and battles. These are just the headlines of history which move the narrative along, and not its real root system which fans out through the whole of society. And this brings us to his second point:
 
History is more about causes than effects. The drive to accuracy doesn’t allow the historian to poke too deeply into the world of motivations, which, certainly to a novelist, is far more interesting although not as verifiable (and may be more attractive because it’s not verifiable);
 
And so for history, the insoluble mystery presented by the incompatibility of free will and inevitability does not exist as it does for theology, ethics, and philosophy. History surveys a presentation of man's life in which the union of these two contradictions has already taken place.
 
By playing down the concept of “free will”, history’s wilfully confining its explanation of why things happen to mechanistic causes. The other disciplines Tolstoy mentions allow themselves the luxury of speculation; but the burden of proof requires the historian to rein in his imagination. And this is contrary to human nature: man is a web of complex motivations, not all of them logical and comprehensible. Nonetheless, doctrinal historians regard the use of such unreliable indicators of behaviour as highly suspect; investigation of “insoluble mystery” isn’t encouraged, whereas to a novelist, it’s essential if he wants to bring his characters to life. And it’s from this Tolstoy’s third point emerges;
 
History, by its very nature as a retrospective activity, places spurious structures on the facts;
 
If I examine an act I performed a moment ago in approximately the same circumstances as those I am in now, my action appears to me undoubtedly free. But if I examine an act performed a month ago, then being in different circumstances, I cannot help recognizing that if that act had not been committed much that resulted from it- good, agreeable, and even essential- would not have taken place. If I reflect on an action still more remote, ten years ago or more, then the consequences of my action are still plainer to me and I find it hard to imagine what would have happened had that action not been performed. The farther I go back in memory, or what is the same thing the farther I go forward in my judgment, the more doubtful becomes my belief in the freedom of my action.
 
What Tolstoy’s saying here is that the further removed you are in time from what happens, the more you can place it in contexts and structures that are  often bogus. Not necessarily deliberately, either: you might simply have a tidy mind that isn’t enamoured of loose ends. Some would call this necessary perspective, but Tolstoy reckoned it’s more like over-rationalization. In his eyes, therefore, history will inevitably favour the conspiracy over the cock-up. And, as we all know from our own experience, there’s no shortage of the latter in everyday life. Not everything is planned and executed faultlessly.
So history, in the way it represents reality, is often way too neat.
 
 
Witness the sheer vanity in all those political autobiographies where experience has subsequently “proved” the subject to have been right all along, even though at the time the events were occurring he was giving a very convincing impression of being a clueless idiot running around like a headless chicken. We all know it’s crap, but are usually happy for the politician concerned to wallow in the fantasy he’s created of his life, even though it’s a travesty of the truth. We figure that being politicians, they just can’t help themselves.
And that’s why Tolstoy wrote ‘War and Peace’ and not a history of the Napoleonic Wars. History usually ends up being too narrow, causal and schematized for its meaning to be recognizable as ‘real’. There’s too many straitjackets for the creative mind to work inside.
And Tolstoy practised what he preached: we need only look at his characterization of the Russian Marshal Kutuzov: Tolstoy transforms him from the cunning, elderly, corrupt and sycophantic courtier of the early drafts of ‘War and Peace’ which were based on authentic source material, into the powerful symbol of the Russian people in all its simplicity, dignity and inherited wisdom he became in the novel’s later manifestations - once, that is, his creator decided he wasn’t going to let history stand in the way of his artistic ambitions which, clearly, weren’t reconcilable with the facts he’d unearthed in his research.
Perhaps the consummate writer of faction in the modern era is Gore Vidal, whose cycle of novels chronicling American history have provoked numerous controversies which have often dragged on for years following publication. By far and away the most contentious has been ‘Lincoln’ (published in 1984), in which Vidal employs not a single authority figure but multiple narrators (Lincoln’s personal secretary John Hay; his wife, Mary; Secretary of State William Seward; Secretary of the Treasury Salmon P.Chase, and Southern sympathizer David Herrold) to reveal aspects of Lincoln’s thought and behaviour many of the President’s apologists would rather not draw attention to. I mentioned the Queen’s visits to the smallest room earlier - now here’s details of a President’s:
 
 
A teetotaller . . . Lincoln was also . . . averse to food in general, [due to] a constipation so severe that he seldom moved his bowels more than once a week; and was obliged to drink by the gallon a terrifying laxative called blue mass.
 
I’ve no idea where Vidal dug up this remarkable piece of information, but his absolutely scrupulous eye for detail elsewhere in the series convinces me that he didn’t just invent it. And what about the comic interlude in a Washington whorehouse during which Lincoln's former law partner informs Hay that Lincoln had contracted syphilis as a young man and had, just before marrying Mary Todd, suffered what can only be described as a nervous breakdown? Not something you routinely find in the history books, but facts that can  be corroborated without too much trouble.
Notwithstanding these, ahem, fascinating revelations, Vidal has regularly shown himself prepared to go to the wire over even the tiniest narrative details, including, in just one example noted by an enraged reader, the shakiness or otherwise of Lincoln’s handwriting in a particular letter. In his reply published in the correspondence column of the New York Review of Books, Vidal explains;
 
A member of the Lincoln Brigade of hagiographers has taken exception to my comment on the signs of stress in Lincoln's handwriting, particularly the letter to Governor Andrew of Massachusetts, which I have examined (at Brown [University Archive]), so unlike in its straggling lines "the eloquent thought-out letters to Mrs. Bixby and other mourners for the dead." I have only seen a reproduction of the Bixby letter, the work of a secretary but very like Lincoln's own clear firm hand when not in a state of panic. As usual, the brigadier misses the point which is not who did or did not copy Lincoln's letter to Mrs. Bixby but the revealing letter to Andrew so unlike, etc.
 
Shaky handwriting denotes someone who is either drunk, ill, uncertain or afraid - and an All-American Hero of Lincoln’s stature can be none of these things if he’s to live up to the image created and fostered by  the more institutional (OK, right-wing) American historians. Many of Vidal’s critics are unable to advance beyond the idea that to flesh out a story in this way is inherently disrespectful not only to the subject, but also to received history - and as a regular and often mischievous debunker of authority figures, Vidal lays himself open to these charges more than most. Yet many readers are convinced of his sincerity, particularly when he’s prepared to go to such assiduous lengths to detail his sources. Vidal has most definitely done his homework, as he makes clear in the novel’s Afterword, in which he attempts to answer the question `How much of Lincoln is generally thought to be true?
How much made up?' , before proceeding to thank Professor David Herbert Donald of Harvard's History department not only for his helpful publications but also “for his patient reading and correction of the manuscript”. Vidal then adds a final rider: “Any further errors, if they exist, are mine, not his,” before leaving the reader to ponder the fascinating question - if ‘Lincoln’ makes it onto school curricula, should it be taught in History or English Literature?

A question that can never be answered conclusively.