Primer on Storytelling

Consider the following the joke:

A catholic priest, a minister, and a rabbi want to see who’s best at his job. So they go into the woods, find a bear, and attempt to convert it. Later they get together. The priest begins: “When I found the bear, I read to him from the Catechism and sprinkled him with holy water. Next week is his First Communion.”

“I found a bear drink from a stream,” says the minister, “and I preached God’s holy word. The bear was so mesmerized that he let me baptize him.”

They both look down at the rabbi, who is lying on a gurney in a full body cast. “Looking back,” he says, “maybe I shouldn’t have started with the circumcision.”

This joke contains all of the elements of a complete story:

A character with a flaw
A moment of revelation
A reversal

All of which come together into a singular moment (the punchline) to achieve catharsis (the evocation of intense emotion, in this case, laughter). Catharsis is what elevates the joke from a mere sequence of events into something that makes you laugh. It goes to the heart of what storytelling is really about: memory.

It's a well known scientific fact that events charged with emotion are remembered more vividly than other kinds of events. Successful stories are a virtual experience that, through the emotional release of catharsis, act as a mnemonic device for remembering truths that help people function in society. It is impossible to act on a philosophy which one cannot remember in every day life. A story renders the philosophy into an emotional experience which, by virtue of the natural faculties of our memory, we remember easily.

To demonstrate this, try and recall the last good story you read, saw or heard. It may be difficult to remember particular details--the names or descriptions of the characters, the individual plot events, the descriptions of the setting--but you'll notice that what always sticks out in the mind are the moments of intense emotion, the catharsis--especially at the climax--which all contain, by necessity, the elements listed above.

What remains then is to understand those elements in more detail and then to examine the techniques the writer has at his disposal to achieve them.

Flaw
The character with the greatest flaw in the story is the main character. Ideally this character should also be the main character in the traditional sense, i.e the one whose experience take up the majority of the narrative and from whose perspective we are experiencing the story, but this need not always be the case.

The flaw is an intrinsic characteristic that contains an inversion of the central philosophy of the story. It gives the other two elements meaning. A revelation without a flaw rings false whereas a reversal without a flaw is merely a coincidence. The flaw is a concrete form of the illusion that the story seeks to help the reader penetrate.

The other function of the flaw is to help the reader empathize with the character. Without establishing empathy, it is difficult to achieve the full height of emotional intensity necessary for catharsis. A character without flaws also seems unbelievable and is really only suitable for comic effect.

Revelation
The revelation, assuming that empathy between the character and reader has been established, allows the transmission of intense emotion from character to reader. It is the sudden unveiling of something related to the character's flaw (often to himself) that generates an intense emotion.

For the revelation to be believable, it must be set up from beginning. An element of surprise, though not strictly necessary, is often useful as a way to make a story stand out from its peers. However the key factor is properly evoking the emotions inherent in the reveal.

Reversal
The reversal is an external result of the internal flaw. It is the authors way of showing the consequence of the flaw, either directly, as in a tragedy or indirectly, as in a transformation story.

It is the reversal which creates dramatic conflict in the story, because it is the reversal which creates change. Thus the degree of the reversal gives an indication of how long the story should be. A reversal that happens too violently, from one state to its complete opposite within a short time, feels unbelievable and can never be the final reversal (it's possible to use it as a set up however, as is common in rags-to-riches stories). The bigger the reversal, the longer the story has to be.

As hinted above, the reversal should be a consequence of the flaw. If it is unrelated to the flaw, it will feel arbitrary and nonsensical. The reader may be willing to accept miracles and divine intervention so long it relates to the flaw in some way. A man losing his life in a hurricane is an accident. A man losing his life in a hurricane because of his stubborn refusal to move out, is a story.

Techniques
Stories can be told in many different mediums, and each contains its own set of techniques. The ones described here have been taken from various craft manuals specifically pertaining to narrative literature (novels, novellas, short stories etc.).

In order for the catharsis of the story to have full effect on the reader, two things are necessary:

To hold the reader's attention until the cathartic moment
To transmit the story's philosophy to the reader in the catharsis
These things are unfortunately at cross-purposes. Making the philosophy too clear, e.g by blunt declaration, will lose the reader's emotional interest. Focusing too much on reader's attention, e.g by plot contrivances, will distract from the philosophy ingrained in the catharsis. It's as important to know when to use the techniques as it is to understand them.

List of Techniques

Iceberg: Dialogue in which the emotion or effect is separate from (or more often, runs counter to) the spoken words. Sarcasm is an intentional form of this (and consequently the weakest form) whose result is humor, but it is more often (and more powerfully) found in an unintentional or subconscious form (i.e subconscious from the character's perspective), so that the effect depends on the disparity in knowledge between the reader and character rather than between characters. The balance lies in making the reader feel smarter than the character but not smarter than the author (i.e preserving the element of surprise). The technique is useful for maintaining the reader's attention (via the tension generated from contradiction of thoughts and speech).
Facade: The intentional contradiction between the characters thoughts and actions to create tension, humor or surprise. Similar to iceberg except here the character discredits himself.
Juggling: Alternating between action and thought to create variety and tension. Similar to facade and iceberg but with action instead of internal monologue or dialogue. The purpose is to help the reader identify with the character while the character performs an action which may be unfamiliar (and therefore of little interest) to the reader. It can also be a way to give the action symbolic weight, by the association of action with internal thought.
Orchestration: The technique of creating characters which are orthogonal to each other for the purposes of variety and dramatic conflict both of which hold the reader's attention. Internally, characters should have opposing values so that they are constantly put into conflict with each other. Externally, there should be no redundancy between characters in either mannerisms, appearance, or speech. These external tags should also remain more or less consistent to the end of the story (unlike the internals which may, e.g in a transformation story, be subject to change). Note in order for opposing characters to come into conflict there also needs to be a reason for them to interact, a binding contract (e.g familial ties). Otherwise they would just avoid each other.
Particularity: The technique of using detail (sensory or otherwise) that individualizes. In some sense the opposite of a generalization, stereotype or cliche, its purpose is to hold the reader's interest by novelty. It can be combined with symbolism for a more subconscious effect. It can also be used as a way to create orchestration between characters, e.g through the use of facade, wherein a character notices details that are unique to his pov and situation.
Symbolism: A form of abstraction in which elements of the setting (e.g weather, location, geography, objects, etc.) become "names" that map to more abstract concepts via repetition. The meaning of the symbol may change as the story progresses. Probably the best technique for unobtrusively transmitting philosophy of the story in the catharsis.
Markers: A signal that reveals a character's sociocultural background. These can be used to develop and maintain orchestration between characters (by giving them different or conflicting social and cultural backgrounds) and inform the iceberg and facade techniques.
Montage: A series of images or anecdotes that create new meaning when juxtaposed. Commonly used to compress time in order to transition between scenes without losing the sense of reality. Can also be used to create symbols where the two juxtaposed images become symbolically linked. The technique is thus useful for both maintaining reader attention as well as transmitting the philosophy of the story.
Save the Cat: An action in the story (usually near the beginning) which establishes the main character as good (i.e sympathetic, and/or worthy of admiration) in order to help the reader identify with him and hold his attention.