Historical fiction must be centered around a historical event. Historical events are not necessarily an important aspect of the plot but they are often used as a reference point to indicate the time frame of the medium. Historical fiction may contain fictional events, or alternate history, but the factual events must be prominent to the plot—and correct. Alternate history is a key component of the science-fiction genre.
Historical fiction must have a fictional plot even though the plot may be centered around historical events or characters. If the main characters were actual historical people, then the plot must contain events that are historically unprovable. A fictionalized autobiography of King Henry VIII, for example, would contain historical characters and events but the actual narrative of his life would have to be entirely speculated. A fictionalized plot is what distinguishes historical fiction from biographies or historical narratives.
Historical characters—that is, real people—is a common element in historical fiction. Often the main characters of the plot are fiction, but historical characters must be present to indicate the historical time period. A good example of this element would be stories about Robin Hood. Robin Hood and his merry men are fictional characters but King Richard the Lion-Heart or King John (or another medieval English king), which are frequently referenced to in these narratives, were actual English medieval kings.
A realistic portrayal of characters is a prime example of how historical fiction differs from other genres, like historical fantasy. Characters must not have access to technology, which was not available in the given time frame and characters must not have any supernatural abilities. Arthurian legends, for example, would be considered fantasy rather than historical fiction. Even though Arthurian legends are set in the past, these legends revolve around the use of magic.