The movie Fire in the Sky does have roots in real-life incidents. However, some elements might have been dramatized or fictionalized for cinematic effect.
Well, 'Fire in the Sky Based on a True Story' is probably centered around an incident that actually occurred in the sky. It could be about a meteorite shower that was more intense or had some unique characteristics. Or it might be related to a strange light or fire - like appearance in the sky that left the witnesses baffled and whose story was then told in this work.