A Story describes a requirement or piece of functionality that will be valuable to a stakeholder.  A Story generally takes the form of:

As a <role>, I can <goal>so that <business value>.
Example: As a Customer, I want to be able to change my Auto policy deductible online, so that I do not have to call my Insurance agent.

The story work item type represents a user story to be implemented. The following are story work item states: 

• New: This is the state when first created and added to the Product Backlog. 
• In Development: Set by the Development Team Member when work starts. 
• In Test: Set by the Development Team Member when the above tasks are complete, and the code has been delivered.
• Done: Set by the Product Owner when satisfied that the story has been successfully implemented and tested.
• Invalid: Set by the Product Owner if the story should never be implemented.

A Story is deferred by setting its state to New and changing its “planned for” iteration to the backlog.