The Collins English Dictionary defines “fanfic” (short for “fan fiction”) as:
(noun) fiction written around previously established characters invented by other authors
While it’s not a new phenomenon (see for example The Testament of Cresseid), it has grown hugely in the internet age owing to the relative ease of dissemination.
What it generally is, however, is derided. Which I find somewhat puzzling. fanfiction.net (hardly the only site out there) has hundreds of thousands of stories in a wide variety of fictional universes, and a wide variety of genres. Okay, it’s not as populous as something like facebook, but the point is that there are a lot of people reading and writing fanfiction; it’s not just an obscure, niche interest.
In fact, I would suggest it’s something that people do instinctively. How many kids make up stories about what their toys are doing? How often do you wonder “what if…”? Humans love stories, and—while I can understand the copyright and intellectual property concerns of some authors—nothing will stop people from being imaginative. Having a starting point makes the process much easier. Most aren’t doing it to make money, or to deprive the original creator. Even if it’s used for publicity for an aspiring author, it’s also publicity for the original work.
In the end, though, it probably comes down to legitimacy. Some creators don’t like the thought of other people playing with their toys, whether for profit or just for amusement. And some people are uncomfortable with the thought that the only reason Sherlock doesn’t count as fanfiction is because they’re getting paid for it. 🙂