Can You Use Real Place Names in Your Books? Can You Fictionalize Details?

Maggie is writing a novel about a group of people living in a made-up place, based on a real location.  She faced a dilemma this month about how much freedom she has, as a fiction writer, to use real places in her story. 

"The reader knows my novel takes place in Minnesota," Maggie told me. "I want to reference lakes, counties and towns that one of the c…