Facts vs Fiction

I was watching "1942 - A Love Story" today (I picked up this movie a few days back along with a couple of others, from a bookstore a few days back).

If you have seen the movie, you would know that its a love story set in the backdrop of the Indian freedom struggle. The plot revolves around the assassination of the atrocious General Douglas, by the freedom fighters. The movie predictably ends with his death.
I have seen this movie earlier and liked it a lot, which is why I decided to have a copy in my movie collection. This time too, I enjoyed the film.

Curiosity got the better of me and I googled on General Douglas and the events surrounding his death. Of course I did not expect the full drama which was portrayed in the movie, to be documented somewhere. I was however hoping for the correctness in the year of his death (1942) and the place (Kasauli). My search got me none of these. The General Douglas shown in the movie actually died in 1964 and definitely not in Kasauli.

This led me to wonder if historical facts, like the year of death of a well-known figure, are allowed to be contorted by movies, under the disclaimer of the movie being a work of fiction.

How much of fact can fiction have?