Literature...
Literature is the art of written works. Literally translated, the word means "acquaintance with letters" (from Latin littera letter), and therefore the academic study of literature is known as Letters (as in the phrase "Arts and Letters"). In Western culture the most basic written literary types include fiction and nonfiction. It started with man discovering his ability to create.People may perceive a difference between "literature" and some popular forms of written work. The terms "literary fiction" and "literary merit" often serve to distinguish between individual works. Critics may exclude works from the classification "literature," for example, on the grounds of a poor standard of grammar and syntax, of an unbelievable or disjointed story-line, or of inconsistent or unconvincing characters. Genre fiction (for example: romance, crime, or science fiction) may also become excluded from consideration as "literature."
Literature is not only a storehouse of creativity. Through its topics of discussion literature is also a take on the history of the world. Dealing as it does with language it is also, 
a repository of the history of language. Ancient literatures like those of Greek, Latin, Hebrew, Celtic, Saxon, Aryan, Dravidan and the like help us learn how these languages have evolved through time and through the ravages of the different cultures conquering them. Literature has also helped preserve for man the different schools of thought, Sophism to Modernism, the Dead Sea scrolls to Structuralism.
It is usually defined as man’s way of communicating with society breaking barriers that usually divide men, those of caste, color, time, gender, status and the like. It is sometimes ‘…a spontaneous overflow of powerful feelings’, or a puzzle to be solved by reading using a context of all that went before and all accrued experiences of the reader.
IMPORTANCE OF LITERATURE○○○
Literature entertains aims to do so either through humor or pathos. If humorous then it’s called a comedy. The goal of comedy is to make us laugh away our sorrows. Humor is sometimes based on the comedy of manners. It rails at society’s idiosyncrasies. Pathos gives rise to tragedy. Tragedies give us a cathartic feeling so that we go away from a book cleansed of emotions and worries. The humors melancholic, sanguine choleric and phlegmatic are believed to induce the various moods in the readers.
Literature inspires and educates aims to make society a better place to live in. Aristotle the father of literary theory believed that all good literature should do so, thus probably starting off the eternal dialogue over ‘art for art’s sake’ vs. ‘art with a message’. The audience of a good work of literature should feel uplifted in thought after completing the book. 
All epics in different languages do this. They convey a message to society through their art.
Though literature is all this, the end result of having read a piece of literary work is a sense of fulfillment, satisfaction and achievement. We recognize we are not alone in what we feel and think, for literature is the depiction of universal thoughts. We realize that men and women have the same emotions and react almost similarly cutting through time, space and matter. Literature intrigues our minds with its allusions, similes and metaphors. When we decipher them we partake of the creative process. This gives us a sense of accomplishment.
The lack of exposure to classic literary works is equal to depriving an individual from an opportunity to grow as an individual. 
Prose, poetry, drama, essays, fiction, literary works based on philosophy, art, history, religion, and culture and also scientific and legal writings are grouped under the category of literature. Creative nonfiction of the ancient times and literary journalism also fall under literature. Certain extremely technical writings such as those on logistics and mathematics are also believed to be a part of literature.
It is through reading such great literary and poetic works, that one understands life. They help a person take a closer look at the different facets of life. 
In many ways, it can change one's perspective towards life. Lives of brilliant achievers and individuals who have made a valuable contribution to society, are sketched in their biographies. These works give the readers an insight into the lives of these eminent people, while also serving as a bible of ideals. Literature serves as an enormous information base.
Literature, is definitely, much more than its literary meaning, which defines it as 'an acquaintance to letters'. It, in fact, lays the foundation of an enriched life; it adds 'life' to 'living'.
References:
http://www.iguides.org/articles/articles/85/1/The-importance-of-the-history-of-Literature/Page1.html
http://www.buzzle.com/articles/importance-of-literature.html
http://en.wikipedia.org/wiki/Literature