Stories are narratives involving the telling of tales or series of events. It is often casual or connected, and can be true or it can be invented. Storytelling as a means of creating meaning through the verbal or written illustration of an even that took place, and it's as old as the human race.
Cultures preserve their identity and sense of reference through shared stories. For example, fairy tales and historical stories (our "history") about what we did and when, all form the backbone of our culture, in both a local sense, and a more global one. Our shared knowledge of stories helps us to have a reference point for who we are and becomes an ever-changing dynamic body of knowledge. Parents tell our children stories about when they were born, about their ancestors, and about their mythologies (the whole basis for religion). There are stories about nations, peoples, places, and each of these becomes the key way in which we distinguish and define ourselves.
The narrative form of a story will often contain a protagonist (the central character), an antagonist (the person who challenges the central character), a setting (the place where the story happens), a tim-frame (which can shift, beyond the standard confines of time's arrow that the average person experiences), and a plot (the sequence of events that drives the story). Usually there will be an overriding theme and some sense of progression, though not always.