'Xiǎo shuō' literally combines 'xiǎo' (small) and 'shuō' (to speak or tell), historically reflecting its origin as short, informal narrative tales—distinct from formal historical records or philosophical texts. Over time, it evolved to mean 'novel' in the modern literary sense: a long, fictional prose work with developed characters and plot.

This term is used broadly across Chinese-speaking communities for both classical and contemporary fiction, including genres like romance, mystery, science fiction, and historical novels. It appears frequently in bookstores, school curricula, literary discussions, and digital reading platforms. While 'shuō' alone can mean 'to speak', in this compound it carries the meaning of 'narrative' or 'storytelling', not oral speech—so 'xiǎo shuō' should never be interpreted as 'small talk'.