meaning that it is 'of the story' or something that could/did ACTUALLY happen in a story, used by fans and fanfictioners
Izzi: Gosh, Marrie, you really like the Harry and Ginny pairing for Harry Potter
Marrie: Yeah, but it's totally cannon.
Izzi: I know, I read the seventh book
Jen: OMG! McGee and Abby are such a cute couple.
Dan: And it's cannon, have you seen the latest NCIS
Jen: I know, Abby totally kissed McGee's head!!