Stories with significance have theme and meaning. A character-based story, where coincidental happenings and fatalistic plot progression is secondary to character strengths and weaknesses, is one way, if not the best way, to achieve this. For most writers, the meaning of a character-based story is vague. A genre writer, dependent on plot twists and surprises that characters live and react to rather than effect, would believe characters in a mystery, suspense or thriller story, especially superheroes, would qualify as "character-based." Batman saved Gotham City. What can be more character-based than that? But the emphasis is different when trying to achieve meaning, theme, and enlightenment with a story. In this type of story, the plot actions are driven, or at least affected, by the character's human characteristics . . . the foibles, flaws, or special gifts, usually related to goodness. Of course, Batman is a good guy with special (superhuman) gifts. But his humanity has little to do with saving the city. Instead, evil threatens the city and he happens to be in the right place at the right time to prevent destruction. He is a creature of the plot rather than the heartbeat.
Here is a story that has lasted for hundreds of years. It will serve as an example to clarify the meaning of character-based story.
Once upon a time, in a village near the deep dark woods, Little Red Riding Hood wanted to take Grandma, who was very ill, a basket of goodies. She would have to walk through the woods for half an hour to get to Grandma's house, which was in another village. 'Be careful,' her mother said. 'Go straight on the path and do not talk to strangers.' So Little Red goes into the woods and meets a wolf who wants to eat her but can't because there is a woodsman nearby. The wolf asks her where she's going, whom she will visit, and where. Red tells all. The wolf runs off and Red continues her journey, leaving the path to chase butterflies, and pick bluebells, and dip her toe in a cold refreshing stream. When she gets to Grandma’s house, the wolf has already arrived because she failed to heed her mother's warning about staying on the path. He imitated Red's voice to gain entrance, and he devoured Grandma. Then he dressed in her night clothes and crawled in bed under the covers. Little Red arrives. He tells Little Red to come in. As the wolf exposes himself little by little, Red listens to his smooth talk when she asks him about his big eyes, hairy arms and big teeth. Unsuspecting, she gets in bed and he devours her.
What has held this story in the collective consciousness of humans for centuries? First, it carries three significant messages. Listen to your parents. Innocence and naïveté can cause irreversible harm. Don't trust a wolf in grandma's clothing . . . you can get devoured. There is also the effective metaphor of the wolf for a child predator. But the significance of the story is mainly carried by the narrative story structure. Little Red is a character-based story. The plot moves forward because of Red's human characteristics — especially her human foibles: she holds onto her childhood innocence, and she disobeys her mother.
This story could be framed as genre fiction. It could still be interesting, but it might not be as lasting because of the structure. Here is a possibility.
Red Riding Hood is kidnapped from the woods near her house. A few hours later some bones and scraps of skin are found at her grandmother's house a mile away. The police are called and discover from the gray hairs trapped in grandma's hand-woven throw rug that the wolf did it. The wolf escapes. Red's mother grieves.
This version is a statement of happenings. Red is a part of the plot, but she is not driving the plot with her disobeying her mother and her wallowing in her innocence . . . and also the author would lose the effectiveness of the wolf metaphor when the story moves from fantasy to a more reality-based police procedural.
Here is another genre framework for the story. An action-adventure genre story. Something like this.
Red decides to go to Grandma's house for a visit. In the deep dark forest she meets a woodsman. The woodsman is tracking a wolf that has eaten two children in the last two weeks. Red wants to help find the culprit. The woodsman agrees and sends her out as a decoy. The wolf tries to attack Red, but she stabs him with a knife the woodsman has given her. The wolf runs away, but the woodsman is able to follow the trail of blood. He finds the wolf near Grandma's house, and after a life-threatening duel, the wolf is killed. Red falls in love.
In this story, again, all that happens in the plot is circumstantial. Who Red really is makes little difference. What she says, thinks, or wants would be irrelevant to the story. The same story could be written with Pinocchio as the major character.
To drive home the point, an author could restructure so that Red's decisions do drive the plot to become more character-based again, but in another way. And the story gains meaning.
Red Riding Hood's grandma, who lives in another village, is very rich and has a new dress, a box of Swiss chocolates, and bath oil waiting for Red Riding Hood for her birthday party the following week. But Red wants her presents now, even though her mother tells her to wait until her father can go with Red through the woods, which can be very dangerous. But Red goes anyway to get her presents early, meets the wolf in the forest, and is devoured.
Red is back driving the plot again, and there is significant meaning related to Red's human attributes. Greed and impatience can be disastrous. The writer seeking to write great literary fiction can take two important points from Red Riding Hood story: Structure the story to display what it means to be human through character-based plot, and make the story significant. In Red's case, the significance is partially related to the dire consequences of getting eaten by a wolf after Red's seemingly almost innocuous actions.