A story in which ideas are symbolised as people

One word substitute is Allegory.

Allegory: a story, poem, or picture that can be interpreted to reveal a hidden meaning, typically a moral or political one.
Fable: a short story, typically with animals as characters, conveying a moral.
Legend: a traditional story sometimes popularly regarded as historical but not authenticated.
Parable: a simple story used to illustrate a moral or spiritual lesson, as told by Jesus in the Gospels.