There are three major theories associated with the definition of literature: mimetic, expressive, and didactic. Literature is conceived as holding a mirror to nature and is thus considered mimetic. The expressive theory regards literature as stemming from authors inner being, and hence similarly depends on a notion of mirroring, though here literature reflects the inner soul rather than the external world of the writer. The didactic theory sees literature as a source of knowledge, insight, wisdom, purgation, and perhaps prophecy, and is compatible with both the mimetic, and the expressive theory i.e., literature can depict external and internal realities while at the same time, disseminating valuable knowledge and clarifying emotions.
The Norton Anthology of Literary Theory and Criticism suggests that the dominant view of literature as mimetic and didactic is alive today and it rose with ancient Greeks, and was later challenged by the Romantics and then the moderns. Hence, it is important to develop a historical perspective on the idea, activity and definitions of literature.
The idea of literature from the Renaissance onward has for the most part focused on two issues: the moral worth of literature and the nature of its relationship to reality. At the end of the 16th century Sir Philip Sydney argued in The Defense of Poesie that it is the special property of literature to express moral and philosophical truth in a way that rescues them from abstraction and makes them immediately graspable. Matthew Arnold also asserted that the cultural role of literature should be to take over the sort of moral and philosophical functions that had previously been fulfilled by religion. Then we have William Wordsworth's notion that the object of poetry is "truth carried alive into the heart by passion." Besides, John Dryden in Of Dramatick Poesie (1668) put forward the less idealistic view that the business of literature is primarily to offer an accurate representation of the world "for the delight and instruction" of mankind.
The idea of delight sounds fine but when literature encompasses "instruction," it becomes problematic. Perhaps that is why the writers and theorists during the 19th century often felt that to justify literature by pointing to its accuracy and realism was to put it in competition with the sciences, social sciences, journalism, and photography---a competition they believed it could not win. However, by emphasizing the literariness of literature, they would accord it a distinctive and elevated aesthetic status over competing fields and domains, ensuring its survival and dignity in challenging times.
The later 19th century saw a development towards an aesthetic theory of literature, i.e., literature for literature's sake. Literature has also been conceptualized in the light of critical and theoretical literary perspectives which were in vogue at various points in history. In formalist theory of literature or poetics, neither depiction of external or internal reality nor knowledge about existence or refined emotion distinguishes literature from ordinary and scientific discourse: instead literariness (or poeticity) renders literature distinctive and special. This kind of definition of literature was a turn away from the notion of literature as simply a reliable recorder of nature (mimetic); or as stemming from the author's inner being/soul (expressive); or as a source of morality (didactic).
The premise of the New Critics school of literary theory, on the other hand, was that a work of literature should be studied as a separate and self-contained entity, which set the New Critics in opposition to biographical criticism and to those schools of criticism such as Marxist, psychoanalytical, historical -- that set out to examine literature from perspectives external to the text.
Modern theorists often insist that the language of literature, unlike that of newspapers and science, foregrounds (i.e., a position of prominence, as opposed to background) poetic effects (particularly tropes and figures) that range from alliteration, assonance, metaphor, and paradox of rhythm and rhyme.
Hence, the question, “what is literature?” can be answered by imagining literature with such terms as representation, expression, knowledge, poetic or rhetorical language, genre, text, or discourse. As in most situations and contexts, it is always helpful to be more specific about the self, the text, and the culture, when it comes to defining literature.