This is a term for a literary form. It refers to three types of artistic works:
1) A type of short story in the Tang and Song dynasties that evolved from tales of the supernatural in the earlier Six Dynasties. Later its subjects widened to include social life, and stories about people and events. Chuan (传) means “legendary” and qi (奇) means “strange and unusual,” so the term originally means recounting tales of strange and extraordinary events that have been passed down by word of mouth. The work Chuan Qi by Pei Xing in the Tang Dynasty is probably the earliest work that uses the term. In the Song Dynasty, the Tang novel The Story of Yingying is considered a chuanqi, while the Yuan people called all Tang stories chuanqi of Tang. Song Dynasty chuanqi were more realistic and vernacular than those of the Tang.
2) Song-speech drama, Southern opera and Yuan zaju in the Song and Yuan dynasties, most of which were based on Tang stories.
3) Full-length operas in the Ming and Qing dynasties, which were based on the Southern Opera (Nanxi), and also included some Yuan zaju features. Typical works include The Story of Washing Gauze by Liang Chenyu (1519-1591), Peach Blossom Fan by Kong Shangren (1648-1718), The Palace of Eternal Life by Hong Sheng (1645-1704). The ancient style of chuanqi has evolved and been innovated over the centuries, both in story content and performance techniques. However, its main purpose is still to “tell stories of strange happenings and unusual people.”
The term zaju of the Jin and Yuan dynasties became chuanqi in the early Ming Dynasty. Zaju is northern music, while chuanqi is from the south. Zaju are composed of only four acts, each with its main performer, while in chuanqi there are many acts with several characters of equal importance. In zaju the plot is only about one event, which narrows the story, whereas in chuanqi the various accounts of the main characters are followed in great detail, which naturally makes it all the more interesting. (LüTiancheng: Comments on Qu Drama: Composers and Their Works)
The ancients called drama scripts chuanqi because the extraordinary events, which no one had actually experienced, were passed down the ages. In other words, without the strangeness, no one would bother to pass them on. “Novel” or xin is just another term for “strange and unusual.” If this particular plot line has been performed before and is familiar to thousands upon thousands of people, then there is nothing novel about it, then what is the need to pass it on? It is thus important for those who write scripts to understand the meaning of chuanqi. (Li Yu: Occasional Notes with Leisure Motions )