The holonovel (also called holographic novel) is, like its ancient counterpart, a story with a protaganist and characters with a plot. However, unlike regular novels actual people can become the characters on a holodeck or in a holosuite. The holonovels are coded so that every character's part can be played by a living being. The clothing and facial attributes (i.e. beard, swords, wooden legs) are holographically added to one's body, enabling a person to look the part without any real physical modifications. Holonovels did not replace the traditional writing of novels, as in the 23rd century books are still written. But the holonovels are like the "movie versions" of novels, in which anyone could reenact their favorite book. Captain Jean-Luc Picard is a well-known fan of the Dixon Hill holonovel series, while Dr. Julian Bashir often played novels written by his friend Felix.
Holonovels are not always written for entertainment purposes. For example, Lieutenant Commander Tuvok is the original author of a holonovel in which he simulated the mutiny of the Maquis aboard Voyager. His purpose in doing so was to train new security officers in case that Maquis aboard Voyager ever attempted such a coup d'etat. Interestingly enough though, Tom Paris (and others) took it upon themselves to ignore the original intent of Tuvok and continued the yet unfinished holonovel with pure entertainment purposes in mind. (VOY: "Worst Case Scenario")
Some holonovels contain a jack-in-the-box, which is a surprise ending or plot twist. One such jack-in-the-box afflicted Vic's Las Vegas Lounge and nearly resulted in the "death" of Vic Fontaine (or rather, the resetting of his memory files, which would have effectively erased all recollection he had of the crew of DS9). (DS9: "Badda-Bing, Badda-Bang")