a novel is basically a prose (rhyme-less, verse-less, written literary product) of more than 100 pages or so. It may comprise of ideas of various sources including fiction, which is the product of imaginary thinking that may incorporate / adopt / borrow elements of reality, but cannot factually be verified against the real life situation.
Fiction is a class of literature that is made up of works that are invented or made up. Both short stories and novels fall into this class. A novel is a fictional story that is generally quite long with in depth character development, and a story line that proceeds in a logical, sequential manner.