A parable (from the Greek parabolē) is a short story that illustrates a truth about God and human nature. It is a comparison, often to contrast a mistaken view and a deeper truth. Its Greek roots are "para", as in "parallel", and "bole", as in throwing something.
Although many consider parables to be fictional, they can just as easily be based in fact.
A parable differs from a fable in that the setting is not magical (talking animals for instance). The allegory differs from the parable in length (allegories are longer) and may encompass more ideals than a parable.