Steve Moss is the editor of several books including The World’s Shortest Stories. He seems to be one of the central figures in nanofiction. Nanofiction is defined by Moss as a story of just 55 words that includes each of: a setting, one or more characters, conflict and resolution and a title that is granted up to seven extra words. The San Luis Obispo New Times has been holding and publishing their 55 Fiction contest each year since 1986. They receive many international entries each year. Interestingly, one of the common problems that contest entrants experience is straying from fiction to poems or essays.
The final issue with writing nanofiction is knowing their official definition of a word. It needs a dictionary entry. It can't be hyphenated (or more to the point, that's two+ words). Contractions are single words (note that my example below includes several). Abreviated words -- even if they appear as a single letter, are words, except when they're part of a commonly accepted acronym (one example is NASA) because these have become single words through wide use. Finally, numbers count as words. ("99" is one word, but "ninety-nine" is two.)
Much of the nanofiction that I appreciate has sacrificed explicit clarity for radical parsimony in establishing structure. The story still tells enough to be interesting, but it leaves to the reader the figuring out of details.
Here’s an example:
What exactly is happening in this story?
"Andy, whatcha doin’!?!"
"Ain’t this the guy?"
"I...I can’t see through the plastic."
"Come on Jess, I watched your movies. This rat-fuck’s gonna pay."
"Andy, he’s my French teacher."
"...I saw. Fucking French..."
"Jesus, my mother’s lamp!"
A short time later…
"We got a dead teacher and you’re worried about your ma’s lamp?"
You can find many more examples of nanofiction by searching the web.