Question

in what way is a work of fiction different from a fact file?

Answer 1

Modern meaning of fact is “something collectively perceived to be true” while fiction  is “an imaginative creation or a pretense that does not represent actuality but has been invented”.  Facts can be true while fiction is pure imagination.

Answer 2

The way to recognize a piece of writing as fiction is that it's based on an invented story.  Fiction is a Latin word 'fictio' which means "The act of fashioning, molding or making." Fiction refers to the literature which is created by imagination and is not presented through facts. However, fiction can be based on a true situation or story. Short story, novel, and novella are the types of literature in the fiction genre.  

Fact file or nonfiction is a prose which uses literary techniques to report on persons, events, and places occurring in the real world. Some of the examples of the literary nonfiction are science writings, travel writings, nature writings and so forth.

Nonfiction uses skilled and precise tone and words. Information that is included by the author may predominate with some originality. Importantly, what may interest the reader in the subject is the character.