Wiktionary
n. 1 The act or result of fabulate; a fabrication. 2 (context literary criticism English) A style of modern fiction, similar to magical realism and postmodernism.
Wikipedia
In literary criticism, the term fabulation was popularized by Robert Scholes, in his work The Fabulators, to describe the large and growing class of mostly 20th century novels that are in a style similar to magical realism, and do not fit into the traditional categories of realism or (novelistic) romance. They violate, in a variety of ways, standard novelistic expectations by drastic—and sometimes highly successful—experiments with subject matter, form, style, temporal sequence, and fusions of the everyday, fantastic, mythical, and nightmarish, in renderings that blur traditional distinctions between what is serious or trivial, horrible or ludicrous, tragic or comic. To a large extent, fabulism and postmodernism coincide; John Barth, for example, was labeled a fabulist until the term "postmodernism" was coined.
Usage examples of "fabulation".
If Rory was telling this fabulation, I would not believe ham, but you, Nico!
Not only has it embraced an agenda abandoned by much other fiction -- to place a framework around man's place in the universe -- but also its very forms lead easily to mystery, fabulation and parable, the play of archetypes.