The term ‘fan fiction’ is one of the new additions to the Merriam-Webster Collegiate Dictionary. Here’s their definition, according to the Associated Press:
Fan fiction (1944): stories involving popular fictional characters that are written by fans and often posted on the Internet.
Other new words and phrases making the cut this year are ‘flash mob,’ ‘frenemy,’ ‘sock puppet,’ ‘vlog,’ and ‘webisode.’