"Fiction" includes everything written that is not factual. If it is a story that the author has made up using his or her imagination, it's fiction. A novel is one kind of fiction. A novel is, specifically, a long piece of fiction. A novel is usually an entire book, more than 50,000 words long, telling a long story. Some other kinds of fiction are: short stories, novellas (longer than a short story, shorter than a novel), plays, and graphic novels.

A novel is a book. It is a specific type of book, usually over a certain number of pages (like over ~150). Fiction can be any piece of writing of any length or form, including poetry. "Fiction" means that it not true, it has been written for entertainment purposes. "Non-fiction" is written to inform people, but it may still be someone's opinion and not based on actual facts.