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Given that you tagged The Crucible in your question, it would be relevant to begin with that particular play.
The phrase "based upon a true story" calls readers (or watchers of a play or movie) attention to the fact that there are elements within the text (or plot) which depict something that actually happened.
In regards to Miller's play The Crucible, Miller (himself) states that the play was written based upon actual historical facts. It is well known by historians, lovers of the supernatural, and students alike that the Salem Witch Trials took place. Therefore, Miller's play is based upon a "true story."
Outside of Miller's play, there are many other "mediums" which have used true events to base novels, plays, and movies upon.
Below are a couple examples of other "mediums" which are based upon a true story are:
1. Elephant (2003)- This movie is based upon the shootings at Columbine in 1993.
2. Monster (2003)- This movie shows the writer and director's interpretation of Aileen Wuornos, the first female serial depicted in modern film.
3. We Need to Talk About Kevin (2003)- This novel was inspired by Columbine and other school related shootings.
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