It's a fictional story. 'War Horse' is a work of fiction that uses the backdrop of war to tell a story about a horse's journey. It's not based on a single true story but rather draws on the general experiences of horses during wartime to create an engaging and emotional narrative.
It's a bit of both. 'War Horse' is based on a fictional story, but it is set against the backdrop of real historical events like World War I. The horse's adventures and the relationships it forms are fictional creations, yet they give us a glimpse into the real hardships and chaos of war during that time.