: How do we draw the line between plagiarism and allusion? It’s no secret that in literature we see characters that remind us of other characters. Furthermore, it’s no secret we see plots

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A useful question to ask is: do you want the reader to understand where this is coming from? With pastiche you do, with plagiarism you don't.

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Okay, using William Shakespeare as an example is bad. First off, he has been for centuries and this makes it harder to gauge his authenticity as a writer.
Who could say William Shakespeare retold "Romeo and Juliet" ? Do you see how bad your example is without an historical account or anecdote?

Use something more contemporary cases like Mother of the Matrix, the many cases of James Cameron, Disney, Andre 3000, etc.

What I'm trying to say, if my first paragraph wasn't clear; William Shakespeare has been dead for centuries, we only know from what we're told about him and from what has been left behind. This is why I said it's better to use contemporary cases like those I've listed above, the writer is alive. In this situation, it's not good to use a dead writer, especially one that's has been dead for centuries.

To answer your question, you've already answered it yourself. You can borrow elements from a previous written work, but you make it your own. There's nothing wrong with being inspired by someone's else work.

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We don't. It's a blurred line and a fortune in legal costs on arguing where it lies.

Of course there is a classification, but the lines are always blurred.

On the "white side" there's alluding - when you make your own characters, but draw specific parallels, exploring what-if's of the other work, mocking its shortcomings, or referencing its most brilliant elements. Example: "Space Balls" heavily alludes to "Star Wars", often parodying its elements.

There's also drawing inspiration. It's where you take some of the concepts, but modify them deeply enough to make your story entirely original. Example: "The Lion King" was inspired by "Hamlet".

The gray area has referencing and pastiche. Referencing is when you copy concepts of the original, nearly verbatim, but apply a twist deep enough to create an original story. It may or may not be legal, it may fall under fair use, or be treated as a derivative work. Example: "The Last Ringbearer" is "Lord of the Rings" retold from perspective of the Orcs.

Another gray area practice is Pastiche. It's purposeful, deliberate copying of one's style, up to and sometimes including forging the signature. Since style can't be copyrighted, it's technically legal... in most cases. In art, "discovering" a "lost" Van Gogh painting will be treated as full-scale crime, even if the forgery isn't a copy of any existing Van Gogh painting, merely a pastiche of the style. Sometimes it's a parody (and then protected as fair use), but sometimes it's serious. Example: Dave McClure's poem "The Traveler" is a pastiche of Edgar Alan Poe's "The Raven".

Then there's the dark area of plagiarism, where not enough original thought was put into the work to set it apart as unique, and outright piracy where all pretense of authorship is dropped; only revenue is redirected.

But again, how little referencing is merely drawing inspiration - or how much is plagiarism - this is not firmly defined.

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Legally, there have probably been millions of words written on the ramifications of this question for the law of every nation that has laws on the subject at all.

Historically, Shakespeare didn't just get away with it because he was brilliant but because the laws and customs of Elizabethan England did not have any more than an embryonic concept of intellectual property. Stories and songs belonged to everyone.

Morally, speaking for modern day people who do have, rightly or wrongly, a concept of intellectual property at least for recent works, the answer to your question about where the border between allusion and plagiarism falls is hard to specify in terms of rules that can be made to apply to all cases. Yet when it comes to writing that makes me say, "why, Author Y is just ripping off Author X", nine times out of ten I know it when I see it. The test is whether in going from X's character to Y's version of that character anything unique to Y's mind was added.

The same goes for plots and scenarios as for characters. David Weber's Honor Harrington science fiction novels concerning space warfare around the year 4000 are consciously and openly modeled on C.S.Forester's Horatio Hornblower novels set in the Napoleonic wars. The two main characters even have the same initials. Nobody gets upset because there is obviously a vast amount of Weber's own work and imagination put into the Honor Harrington books.

Weber clearly admires Forester's books, but there have also been very successful "inspired by" characters (and plots and scenarios) where the second author was reacting against the way the first author did it, saying, "no, that's not the way things would be." I haven't read it but from what I've heard Eliezer Yudkowsky's Harry Potter and the Methods of Rationality would be a case of this. Yudkowsky gets away with having his book be about literally the same character because a positively obsessive amount of his own thought has gone into making his story different from J.K. Rowling's original. That difference is the whole point.

Many aspects of the story I am working on arose in my mind because I said, "no,that's not the way things would be" to some common tropes of the sub-genre, even when I generally liked the books in which I saw them. I hope that the eventual story will be more than just a reaction to other writers' works, but it will certainly allude to them, though not by name.

I won't get myself into trouble by specifying an author or book that I see as falling on the wrong side of the line between moral plagiarism and allusion. But when every memorable aspect of a character comes from the original author, then I'd mutter about plagiarism, even if it is cleverly arranged to be within the law.

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