Final answer:
The genre where the plot takes place in a setting related to past events but with fictional elements is historical fiction.
Step-by-step explanation:
The literary genre in which the plot occurs in a setting related to past events but is fictional is known as historical fiction. This genre uses a factual setting and creates fictional characters that live and interact within the historical context. Authors of historical fiction like Victor Hugo and Kjartan Fløgstad craft their narratives to provide readers with an immersive experience that is historically accurate in its depiction of the era while weaving in purely imaginary elements through the characters and their personal stories. Examples such as 'Les Miserables' show how an author can embed fictional narratives within real historical events.