The Invention of History: Herodotus and Thucydides

What is history and how should we approach ancient stories written before its invention? What are the circumstances that led Herodotus and Thucydides to develop the discipline of history in the Western tradition? What made their accounts of events different from previous ancient stories like those found in the Iliad or the Odyssey? Many stories in the Bible and other ancient works may look like history to us, but they were composed before history existed as a discipline. How should modern readers approach these stories and what value, if any, can we find in non-historical narratives?