[ Short extracts from full-chapter length-copy, as attached.]
Novelists apparently liberated fictionality, for eighteenth-century practitioners abandoned earlier writers serious attempts to convince readers that their invented tales were literally true or were at least about actual people. Candidly and explicitly differentiating their works from the kinds of referentiality proffered by neighboring genres, these writers coaxed their readers to accept the imaginative status of their characters. 
There is mounting historical evidence for the first, more unusual, proposition - that the novel discovered fiction. 
If the etymology of the word tells us anything, fiction seems to have been discovered as a discursive mode in its own right as readers developed the ability to tell it apart from both fact and (this is the key) deception. 
Stories that were both plausible and received as narratives about purely imaginary individuals - a category with which all nineteenth-century European publics would be thoroughly comfortable and familiar - were still exceedingly rare in the first quarter of the eighteenth century. 
since the definition included plausibility, the history of fiction seems simultaneously to trace a movement from greater to lesser visibility. As the novel distinguished itself through fictionality, its fictionality also differentiated itself from previous incredible forms. Hence we have another way of imagining the paradox: the novel slowly opens the conceptual space of fictionality in the process of seeming to narrow its practice. 
Whereas an older generation of literary critics had taken fiction for granted as a transhistorical constant and viewed the novels achievement as the addition of realism, more recent scholars have correlated the simultaneous appearance of fictionality and the novel. 
The widespread acceptance of verisimilitude as a form of truth, rather than a form of lying, founded the novel as a genre (McKeon 2002). It also created the category of fiction. 
[Quotes Henry Fielding on the novel as a representation of the species rather than the individual man, and hence a correcting parent rather than an executioner.]
Reasserting Aristotles point, mid-century novelists stressed that probability was a sign of fictionality as well as a mode of reference; it was designed to switch off the personal reference of proper names.
Of course, the elaboration of this theory ran into immediate difficulties. To begin with, novelistic personae, even when invented on purpose to exemplify classes of persons, quickly proved too specific to cover all cases in a species. The excessive and irrelevant detail of any individualized instance tended to obscure the view of its supposed class, and consequently mideighteenth-century authors entered into numerous disputes over how typical a characters behavior needed to be before it could be judged probable.