How has literature adapted itself to the 20th and 21st centuries?
Literature has changed quite visibly in form and intent over the last century. We can't argue that it has completely changed over this time period (functionally, it remains a form of artistic story-telling and/or expression using language exclusively).
As cultures have changed and our world has changed, literature has adjusted to comment, predict and contemplate upon these changes. With the emergence of Freud and psychoanalysis, the novel began to take up subjectivity of experience as a major theme (Modernism).
A sense that the world was not a universal objective reality but instead an individually interpreted one can be seen across poetry and fiction from the first half of the 20th century (and continues to be seen today). This trend grew out of a number of circumstances and ideas from WWI and WWII to movements in the art world at large like Cubism and Surrealism.
The notion of distinct individual realities can be said to have moved from an intellectual concept to an emotional one with the advent of Magical Realism, where stories no longer adhered strictly to physical laws of time and space, but were instead expressions of the spirit and a spiritual need to find meaning, dignity and integrity in a world that offered little opportunity for these discoveries.
Today, we see globalism on the bookshelves. Literature that is expressive of the universality of the human experience is popular (in direct contrast to the individuating literature mentioned above).
Formally speaking, books have gone digital - while remaining analog too - and many stylistic moves have been made, back and forth from linear story-telling to fragmentary and epistolary "conceptual" novels. These changes take into account the various perspectives available to us in a world where sociology, psychology, and physics have filtered into the communal "thought stream", lending laymen multiple ways to view experience and to construct meaning.
At nearly all levels except the most essentially basic one, literature has adapted itself to the 20th and 21st centuries. Appearing online, on eReaders, and on bookshelves; being written by hand, typed on type-writers and typed on computers; addressing changing mental landscapes and changing commercial ones; emphasizing collectivity and individuality - literature has shown itself to be very flexible and able to articulate many of our deepest fears and desires that make up and result from a constantly changing world.