Narrative Theory: The idea starts with the belief that humans half to tell some sort of story in order to understand their own purpose -- or at least that is how I interpret it. 

Here is Narrative Theory as it pertains towards Ohio State University: 

Narrative theory starts from the assumption that narrative is a basic human strategy for coming to terms with fundamental elements of our experience, such as time, process, and change, and it proceeds from this assumption to study the distinctive nature of narrative and its various structures, elements, uses, and effects.

Jonathan Culler made advancements in Narrative Theory as late as 2007 exploring various narrative theory ideas in Literary Theory: A Short Introduction.

Narrative Theory is closely aligned with other various theories.

Culler himself has written studies based on Structuralism and linguistics. 

The way a narrative is written as a story or fiction and non-fiction media is an example of Narrative Theory

In William Blake's Songs of Innocence some critics interpret the poem much differently than others. Blake left his tale open ended for various critics -- some see the tale as a moral call-to-arms, while others see the story as a way to romanticize the idea of innocence. 

Further Reading: