It is a film genre  which attempts to capture reality such as it is (as direct cinema or cinéma vérité) and which simultaneously introduces unreal elements or fictional situations in narrative in order to strengthen the representation of reality using some kind of artistic expression.
More precisely, it is a documentary contaminated with fictional elements, in real time, filmed when the events take place, and in which someone – the character – plays his own role in real life. A film genre in expansion, it is adopted by a number of experimental filmmakers.
The new term docufiction  appeared at the beginning of the 21st century. It is now commonly used in several languages and widely accepted for classification by international film festivals. Either in cinema or television, docufiction is, anyway, a film genre in full development during the first decade of this century.
In contrast, docudrama is usually a fictional and dramatized recreation of factual events in form of a documentary, at a time subsequent to the "real" events it portrays. A docudrama is often confused with docufiction when drama is considered interchangeable with fiction (both words meaning the same). Typically however, "docudrama" refers specifically to telefilms or other television media recreations that dramatize certain events often with actors.
A mockumentary (etymology: mock documentary) is also a film or television show in which fictitious events are presented in documentary format, sometimes a recreation of factual events after they took place or a comment on current events, typically satirical, comedic or even dramatic  (see genres: drama versus comedy and tragedy). Portraying events at an ulterior time and basically using fictional narrative such as docudrama, it should not be confused with docufiction as well.
Being both fiction and documentary, docufiction is a hybrid genre, raising ethical problems concerning truth, since reality may be manipulated and confused with fiction (see Ethics at creative non-fiction).
In the domain of visual anthropology, the innovating role of Jean Rouch allows one to consider him as the father of a subgenre called ethnofiction. This term means: ethnographic documentary film with natives who play fictional roles. Making them play a role about themselves will help portray reality, which  will be reinforced with imagery. A non ethnographic documentary with fictional elements uses the same method and, for the same reasons, may be called docufiction.
See more: at Docufiction films (Categories)