Secular historians use history or itihāsa when referring to events on geologic time scale that don't contradict science which is primarily based on pratyakṣa and anumāna pramāṇas.
So when it comes to the two Hindu epics, Rāmāyaṇa and Mahābhārata, these people consider only those events described in them to be factual/historical that conform to the laws of nature.
Take for example these two statements from Vālmīki Rāmāyaṇa:
(Bāla Kāṇḍa, Daśaratha speaking to Viśvāmitra:)
Sixty thousand years have passed from my birth, oh! Vishvamitra, and this Rama is engendered at this age, that too with tribulations, hence taking Rama with you will be inappropriate of you. [1-20-10b, 11a]
(Yuddha Kāṇḍa, Vālmīki narrating:)
Having enjoyed the kingship for ten thousand years, Rama performed a hundred horse-sacrifices, in which good horses were sacrificed and numerous gifts bestowed. [6-128-96]
The astronomical figures used to describe Daśaratha's age and Rāma's reign directly contradict nature (and also Śruti) so such statements are usually considered mythology (folklore) and ignored by historians when determining lineages of kings.
Here's another story from the Mahābhārata which narrates how a fish delivered two human twins:
And the king [Uparichara Vasu] became possessed with desire, and he saw not his wife before him. Maddened by desire he was roaming hither and thither, when he saw a beautiful Asoka decked with dense foliage, its branches covered with flowers. And the king sat at his ease in the shade of that tree. And excited by the fragrance of the season and the charming odours of the flowers around, and excited also by the delicious breeze, the king could not keep his mind away from the thought of the beautiful Girika. And beholding that a swift hawk was resting very near to him, the king, acquainted with the subtle truths of Dharma and Artha, went unto him and said, 'Amiable one, carry thou this seed (semen) for my wife Girika and give it unto her. Her season hath arrived.'
The hawk, swift of speed, took it from the king and rapidly coursed through the air. While thus passing, the hawk was seen by another of his species. Thinking that the first one was carrying meat, the second one flew at him. The two fought with each other in the sky with their beaks. While they were fighting, the seed fell into the waters of the Yamuna. And in those waters dwelt an Apsara of the higher rank, known by the name of Adrika, transformed by a Brahmana's curse into a fish. As soon as Vasu's seed fell into the water from the claws of the hawk, Adrika rapidly approached and swallowed it at once. That fish was, some time after, caught by the fishermen. And it was the tenth month of the fish's having swallowed the seed. From the stomach of that fish came out a male and a female child of human form. The fishermen wondered much, and wending unto king Uparichara (for they were his subjects) told him all. They said, 'O king, these two beings of human shape have been found in the body of a fish!' The male child amongst the two was taken by Uparichara. That child afterwards became the virtuous and truthful monarch Matsya.
This blog gives a more rational, acceptable and historical account of the same story:
Adrika was a maiden belonging to the Matsya (fishermen) tribe and Vasu beget two children in her, probably when he was away from his wife Girika. Adrika was described as an Apsara, due to her beauty. Apsaras were mentioned as extremely beautiful. The word 'Apsara' can be divided into 'Apa' (water) and Sara (lakes). They were often described as women seen in the vicinity of water-bodies like lakes and rivers. A Matsya lady (fisher-women) too lives close to water-bodies like seas, lakes and rivers. There are also myths about fairies called Matsya-Kanyakas (fish-women / fisher-women) who were half fish and half women. Such tales were also similar to the tales of Apsaras. Thus Matsya Kanyakas and Apsaras seem to be same. Both these terms later assumed the meaning of fairies living close to water bodies, and Apsaras in particular was formerly their tribal name. Fisher-women were the Apsaras and the Apsaras were the fisher-women.
Adrika probably died while delivering the twin babies. Death of women after delivering babies, especially twins, were quite common in those days. The fishermen after learning about the affair between Adrika and the king might have taken the babies to the palace. King after knowing that he was the father of the twins could have raised them in his palace. The male among them later became the famous Matsya king. It is probable that this Matsya king was the forefather of king Virata. Similarly the female among them was probably the ancestor of Satyavati whom king Shantanu wished to marry. The territory of the Matsya chief, who was the father of Satyavati was on the banks of river Yamuna where as the territory of king Virata was south-west to Yamuna in Rajasthan comprising the districts of Alwar and Bharatpur.
So whether one uses history, itihāsa ('it happened thus') or mythology ('exaggerated account of a real event or fictitious altogether') for things described in Hindu scriptures, really depends on the nature of the stories and also if the individual generally interprets them literally or allegorically.
If your faith requires you to give utmost importance to śabda pramāṇa, you may have to take everything literally or go with your guru's interpretation when things don't make sense.
If on the other hand, you follow no particular belief system, you are free to call things that conform to reality as history (or itihāsa, it happened thus) and the unbelievable stories as mythology (traditional accounts, either exaggerated or fictitious).
Same goes for Purāṇas and any other Hindu scripture.