Fiction is any story or setting that is derived from imagination - in other words, not based strictly on history or fact.
Reading novels is permissible provided the contents of it is not harmful to you whether emotionally or Psychologically or any other harm. Skipping the harmful parts and reading the rest is permissible with the above condition.
Every act which is useful for people is allowed and every act which is harmful is not allowed. Allah says in Quran يُحِلُّ لَهُم الطَيّبات وَيُحَرِّمُ عليهم الخبائث which means that the religion of Islam allows every good and does not allow every bad.
Writing is no exception. Writing can be useful to provide useful information and encourage good values and good deeds, and can be otherwise. Writing fictional horror stories or novels of fear and violence should be judged by the amount of harm or benefit of it to the human society. If it is harmful, then it must be avoided.
Reading or writing financial books is allowed as far as it does not encourage unlawful transactions or usury. Fairy tails books are also allowed as far as it does not contain misleading or wrong statements and it should not waste lot of time because time is our main capital in this life and we must utilize it in the nest way.
Writing of fictions or novels is permitted provided they do not go beyond the bounds of shari'a. So, for example, writing a novel which could clearly lead to lustful thoughts or acts is haram, so is writing any form of material which is insulting to Islam or God, the Prophets, and Imams.