Today I wanted to offer a quick and very rough guide to terms used around material connected to folklore. I find that this subject can be very confusing for people and hope this may help a bit with that. Disclaimer that these definitions are based in my own understanding of these concepts as an amateur folklorist.
Folklore - according to Oxford dictionary folklore is "the traditional beliefs, customs, and stories of a community, passed through the generations by word of mouth.". Folklore has several key aspects including both its oral nature as well as its existence within a community. Folklore is also fluid and evolving, showing change in line with the community it is attached to.
Michael Fortune's Youtube videos of people being interviewed and discussing their community's or their family's fairy beliefs is an example of folklore.
Anecdote - an anecdote is a personal story being recounted by the person who experienced it or passed on as such. It represents a real person describing events they witnessed or experienced.
Someone describing their own encounter with a fairy is an anecdotal account.
Retellings - Much of the Victorian material we have, as well as some popular modern material, falls into this category. Retellings represent folklore that is being preserved in written form with additions from the author; there can often be a fine line between a retelling and the folkloresque but while retellings often add flourishes and drama they generally adhere to the broad strokes of the original folklore.
Lady Wilde's work may best be described as retellings.
Folkloresque - Also previously known as fakelore and sometimes called folklorism, folkloresque is material that is rooted in folklore concepts of motifs but which heavily incorporates creativity and fiction to create something new. The folkloresque isn't properly folklore - it isn't representative of a group's beliefs or practices - but is inspired by or based on existing folklore. Another key difference between folklore and the folkoresque is that the folkloresque exists in a fixed form.
The movie Labyrinth can be described as folkloresque.
Fiction - is written work that describes imaginary stories or relates events that aren't true. This is why works of fiction usually include disclaimers that the work was created by the author and any resemblance to real people or places, etc., is unintentional. Fiction is an exercise in human imagination and is usually predicated on telling an interesting story.
The Dresden Files is an example of fiction.
There is often debate on whether or not folklore is fiction, but in my opinion this presupposes that folklore is untrue and was created at some point purely for entertainment, which ignores the key aspect of folklore as belief and practice of a community. Whether or not stories of selkie wives did happen they represent active belief in a community, with attached practices, and were understood as true by the people who believed in them. Fiction in contrast is created intentionally to be a story for entertainment. This is an essential and pivotal difference.