Are they still Fanfictions?

How's it going everyone.

My brother and I recently did a vlog on our opinions about writing and reading, but one part in particular applies to this very site. That subject regarded fanfictions, more specifically, whether or not original characters should be used.

My brother posited that a written work is only a fanfiction when it includes only cannon characters from the show, with no additional and original ones. In other words, no OC's allowed. I may be misinterpreting him, but I'm pretty sure that that is what he meant.

Now my position is that as long as your story takes place in the pre-existing world from which your fandom spawned, this is a fanfiction. It might become a bit of a stretch if there are no cannon characters, either in actual appearance or by reference. But if it takes place in, say, the world Equestria exists in, shouldn't it be considered a fimfiction? If someone wrote a story of a new character using Pokeballs and capturing completely new creatures he christens as Pokemon, would this be considered a Pokemon fanfiction?

More importantly, and to the actual purpose of my blog, I ask the question, what do you prefer? The inclusion of OC's or the exclusion?

The site seems to have made up its own mind regarding this topic, as OC is a character you can select for your story. And I personally enjoy writing original characters. But I'm curious as to what everyone else thinks. Let me know your take on this matter in a comment.

Thanks for reading!

Terry Candlestick