According to Wikipedia, Fiction is any creative work, chiefly any narrative work, portraying individuals, events, or places that are imaginary or in imaginary ways.
According to an AI overview on Google, Fantasy is a story that includes fantastical and unbelievable elements, often featuring magic, mythical creatures, and imagined worlds, essentially making the "imaginary" elements the narrative’s core.
The line between these two literary approaches may need to be thicker. The term fantastical suggests that what is portrayed is beyond the scope of normal life, with often a unique universe for what happens, including events and life forms we don’t personally experience.
When we read fictional events, they often seem fantastical, but given enough time, we often look back on what we thought was fantastical and realize that it was indeed real.