Can I make up people and places in historical fiction?

Your leaning toward just fiction with historical aspects.
Generally historical fiction deals with something that happened in history adding characters that weren't there but, in the setting of the real event for example. The movie the patriot. The main character didn't exist but the setting and everything around him did.

Historic is sort of like its so real they could of been there.
Now if your dealing with something like the crusades or the plague that happened in England than yeah it's historic fiction but, it depends on what historic event is happening at the time