That is a good question. And then that raises other questions.

Fargo claims it was "based on a true story," but it obviously was completely fictional and original. Sure.

But then you have Texas Chain Saw Massacre, which also claimed it was "based on a true story." Obviously fictional, but they based Leatherface somewhat on Ed Gein. And how about Inglourious Basterds? Obviously didn't happen (Hitler getting mowed down by Americans in a movie theatre, an American unit whose sole purpose is to murder Nazis) but it's generally based on WWII. But we'll still call those original.

And then let's take something like Pocahontas. Not based on anything beside history. However, it's a Disney story, so it's got a lot of artistic liberties. Pocahontas and John Smith falling in love? Never happened. Ratcliffe, the evil guy? Flayed alive and burned at the stake by Indians who invited him to trade with them but ambushed him instead. So what would we call that? I'd say adaptation, but then at what point does adding "non-true" details to a story make it an original as opposed to an adaptation?