In looking for something in the recent issue of The Friend, I came across the the article "Fiction or Nonfiction?", all about a little girl's struggle with whether or not the Book of Mormon belonged in the Nonfiction section, which she decided it did.
I'm opposed to the true/false binary for religious texts, and most bookstores and libraries agree with me. They tend to have their own section, usually somewhere between cookbooks and biographies, saddled alongside opinion books. Why? I'm sure that in part they don't want to offend parties that believe that they are "fiction" or "nonfiction," but I also believe that it's because truth isn't so simple.
Take a look at art. Do we categorize art as true or false? Not really. There are photographs and videos, which are "true" and can be used as legal evidence, but they can be edited and altered, and people can act. Portraits are pretty close to representing reality, and have long been used for genealogical purposes and identifying criminals. Even still, there is freedom for artistic expression in the representation of truth. Landscapes and still-lifes fall into the same category--based on reality, but altered somewhat. What about cubism? Surrealism? The pieces are true to the artist's intent, certainly, and that's their purpose.
Now back to writing. Where does poetry fall? And are journals fiction or nonfiction? Every person has a bias in telling their own story. There are things we don't see or understand from our singleton perspective. And on top of that, we are natural storytellers, making up reasons for why we feel a certain way, even if a reason is simply created to justify a feeling. So even if the individuals narrating the Book of Mormon really existed, they were still writing down their perspectives and they wouldn't have been all-knowing.
Religious texts exist on a plane of spirituality, not a plane of history. Their purpose is to expand the mind, and draw closer to the divine. The intersect history somewhat, to be sure, as do all things. And we can project them onto the plane of history and learn from the projection, but in the end, they don't live there. Things can be good and meaningful on either side of the true/false nonfiction/fiction classification system, but not everything needs to be classified that way in the first place.
It's common for folks at church to say that they know the Book of Mormon is true. We'll, I don't know that it's true. I know that it's good and meaningful. It teaches me about the divine and about humanity. Joseph Smith has a famous quote, "I told the brethren, that the Book of Mormon was the most correct of any book on earth, and the keystone of our religion, and a man would get nearer to God by abiding by its precepts, than by any other book." Here, I take "correct" to mean morally correct, not historically, and frankly, I'd rather have the former than the latter. We can wonder and worry about its origins, tiptoeing around top-hats and seer stones or analyzing native american anthropology, but in the end the real question is: does its narrative help me in my journey to be the person I want to be?