I doubt anyone can tell if its a pure fiction or not. As @T.E.D. mentioned, these stories were recited in the early days and were transferred from one generation to another generation. Since you know the story, you can make a lot of references to the places mentioned to the present Indian cities. There are lot of things in the Vedas, Hinduism and the Indian history that are told to be true but do not have a proof. It is upto you to decide if you actually believe in them or not.
Putting that aside and thinking it from a different perspective, All the Indian mythological stories were trying to teach you the Meaning of Life and your existence in this world.
Also refer to this link
the meaning of life is tied up in the concepts of karma (causal action), sansara (the cycle of birth and rebirth), and moksha (liberation). Existence is conceived as the progression of the ātman (similar to the western concept of a soul) across numerous lifetimes, and its ultimate progression towards liberation from karma.
From what I understand, History is written or recited so that the future generations will not make the same mistakes and will lead a better life :)