Essentially, I'm making a rough, first-pass SFnal analysis of fiction in general. Start with naturalistic fiction, or perhaps more accurately, fiction without a consciously self-identified genre. (And taking firm note of the fact that genre is in a very real sense a marketing element rather than a story element.) I posit that all naturalistic fiction falls into one of four categories:
Secret history is the default condition of contemporary narrative: things which might have happened or could have happened, but leave the world as it is. Most mainstream novels fall here. Holden Caulfield could have lived or not, the world wouldn't be noticeably different.
Alternate history (not in the technical sense that our field employs the term) is a close cousin of secret history: things which might have happened or could have happened, but would change the world in noticeable ways. If Jett Rink were real, we would be aware of him as an industrialist and something of a tragic figure, in the manner of Howard Hughes.
Mythic history is perhaps the earliest condition of narrative: things which never actually happened, or could have happened in a literal reading, but encapsulate important truths for the tellers of the tale. Gilgamesh was (probably) a real king in Uruk, but the story which was told around him describes the cosmology, aspirations and experience of his people.
Future history is also a very early condition of narrative: things which have not yet happened but might. This ranges from prophetic writings in virtually any literate cultural tradition to cautionary tales such as 1984.
So, setting aside the need for self-conscious marketing categorization, what sets our genre apart from this model? I propose a fifth category which applies to SF/F, arising naturally from the above:
Fantastic history is a fusion of the other categories, most especially mythic and future history, but with self-conscious intent. To simplify, naturalistic fiction tells stories in the present about the present (a highly arguable position, I know -- historical fiction, anyone?), while fantastic history changes the entire purpose of narrative by shifting the focus from currency of topic to some deliberate remove from consensus reality with a transformation in time, space, technology or noumenality.
I need to pull this string some more, and synthesize it with the excellent discussion thread on the last post on genre devices. Maybe I'm reinventing the wheel here (fjm, truepenny or one of our other fine academics can put me in my place if so), but this is a useful thought process to me. I hope it's useful to you as well.