Not a minor phenomenon, or a small community; there are for instance over four thousand pieces of fan fiction set in the world of "Sonic the Hedgehog" (a cartoon and video-game character). The site is really a (very) large number of mostly disjoint communities (probably not alot of people are into both Sonic the Hedgehog and Jane Austen fan fiction), but at least some of those (sub)communities are very active, with a constant stream of stories and reviews (the underlying technology allows story submission, review submission, and personal profiles as the primary means of interaction), in-group conventions and traditions, in-jokes, and so on.
It's possible to browse the entire site (I think?) without any sort of registration, but submitting material requires establishing a (free) account.