Should an author ever compromise on historical authenticity when composing historical fiction? Why or why not?
Nothing in literature is an absolute, so the answer to your question is yes. Major details of acknowledged historical accuracy should be adhered to, but the smaller details that create a personal style, voice, and etc. of the author can be adapted to meet the needs of the story. This is called creative license.
I believe it is okay for authors to spice up stories a bit. After all, it is historical fiction we are talking about. History can sometimes become a bit boring so authors need to do what they can to make the story interesting and sell their book. They should stick to the main facts but it is okay to add a little here and there. After all, the ultimate goal is to sell lots of books.
I would argue that historical authenticity is such a vague concept that authors trying to write historical fiction should do whatever they want to do. Since so much of history, particularly the farther back you go but even today, is based on who is telling it, particularly if something is labeled as historical fiction, I think authors should have as much license as they want.
This is an interesting question, and I think it really depends on each individual and how they feel about it. Ideally, it would be nice if all authors could completely stick to the facts and not elaborate or fill in the gaps; that way, the stories could be relied upon to be a clear and literal historical documents. However, there is a reason that it is called "historical fiction." The fact that the piece of literature is thus labeled essentially gives the author permission to create a bit of fiction in order to tell a story. And let's face it, it also makes history a whole lot more palatable and interesting. Often, the facts don't tell the story behind the events, the feelings and relationships of the people involved, and all of the true drama and humaness of life that existed at that time. That is where fiction can step in and try to fill in the gaps, as realistically as possible, in order to make it a compelling story that people will actually read.
If I could have it ideally, I would hope that authors would never compromise the really big facts--important dates, events and significant, factually established occurrences. To compromise those things is to sell too much in the name of good storytelling. If they need to change minor details here and there in order to create an interesting and compelling story, I am more willing to forgive an author of that. I hope that those thoughts help to get you started; good luck!
It seems to me that authors would just about have to compromise on historical authenticity to get a good story. History is not usually exciting enough to manage to captivate people (and especially kids) without a bit of dressing up. It also becomes harder to get across the message that you want to convey.
For example, my kids checked out a book from the library about Annette Kellerman. It cast her as a big crusader for women's rights when you can argue that she was trying more for publicity than for women's rights when she got herself arrested for indecency. The book also failed to mention that she was the first major actress to do a fully nude scene in a movie...