Fiction in layman terms can be defined as something that is purely imaginary and not real. Fiction can be broadly classified into art and entertainment. But further it can be divided into various genres. They can also be known as classifications of Fiction or types of fiction. However, the understated are purely categorizing whatever has been done so far. Anything new and additional in this field, off these, is warmly welcomed and appreciated.
Mystery. This type of fiction arouses a feeling of predicting what could be next in the readers or viewers. This name, quite obviously has been derived from 'mysterious' which means "anything that is unexplained or is kept a secret".
Horror. Horror, as the name suggests, induces a feeling of fear in the reader/viewer by portraying something that is extraordinarily weird.
Fantasy. The extravagant and unrestrained desires that are poured out through this completely leave everyone experiencing it in an awe of it. The things that you always desired but never could achieve, whatever you wanted to see, whatever you wanted to hear, this is definitely an alternative to dreams.
Science Fiction. SciFi as it is popularly known is the food for brain for those who are desperately looking for some intelligent and planned action away from anime characters. This is real people living in the world of or like machines. All such plots are scientifically motivated and hold some strong factual baseline.
Myths/Legends/Fairy Tales. This is an addition to fantasy. Where in fantasy you most often see "yourself" as the central character, and it is "your" world, whereas in legends and fairy tales, it is something that is based on someone or something else.
Historical Fiction. This is something that is based on history. In layman terms it can be explained as "what would have happened if this thing happened in spite of that during some ancient historical incident."
Humor. Humor is something that is best found in daily life. Fiction that arouses our humor, and renders everyone into fits of laughter is something that is widely accepted and in a way, socially needed in the stressful and worked out lives of today!
Poetry. Poetry is something that touches the soul no matter what frame of mind you are in, be it romantic, sad, neutral, over-worked etc. fictional poetry can take the form of a ballad or simply linked proses.
Thriller. This type of fiction induces a feeling of excitement into the readers or viewers.
Also note your piece of work may not strictly belong to a single category out of the categories mentioned. It can also be best described as a combination of two or more from them. For example, many stories and novels are termed as "romantic comedies" or "romantic thrillers."