It's any story with a touch of fantasy in it that has a PG13 rating. The main thing is that there's one element in the story that's out of the ordinary. Say for example you wanted to do slice of life then one thing about their everyday life needs to be abnormal.
Honestly I'm not going to be super critical about it keeping to the theme, but if someone is submitting a diary comic that's just about their daily life it's probably not going to get in XD I think in this sense we can use the word fiction to best describe what's accepted. I'll make sure to make that more clear on the official submissions page that's released in January.