Allegory is the use of a fictional story to explain, criticize, or explore real-world events or persons. In the Bible, Jesus' parables are examples of allegories, and some consider the bride and groom in the Song of Solomon to be an allegory for Jesus and the Church.
In modern literature, Animal Farm by George Orwell is a good example of an allegorical novel. It uses animal characters to tell the story of Communism in the Soviet Union, from the revolution to the rise of Stalin.