The first piece of gaming fiction I know of is Quag Keep, published in 1979, and written by Andre Norton (an author whose other works I like). I will save the review for another post but it is the first I believe.
There was a lag before other gaming fiction was published - the next BIG thing was the Dragonlance series that kicked off in 1984 - , though several related types of work fired up right away.
One related work was Thieves World, which created the concept of the shared world novel. Multiple authors wrote about their own character in one shared setting, a fantasy medieval city in decline. Elements of these stories and backgrounds were developed through RPG play at the time. The first TW novel came out in 1979.
Another related type of work was the "players transported into a fantasy world" novel, which is similar to Quag Keep but does not used a published game world. The first of these that I am aware of is "The Sleeping Dragon" by Joel Rosenberg, published in 1983. There may have been others, but it's the first one I encountered and the oldest one I can find any mention of.
Finally, the third related type of work is the conventional fantasy novel that takes place in a world and may even use characters generated from a role-playing campaign. Raymond Feist's novels are exhibit A in this genre. Early works in this field tend to have the hallmarks of early D&D - wizards without armor and who do not use swords, priests that heal/temples that are centers of healing, and a gradual progression of the power level of enemies. Compare this to say, Lord of the Rings where one of the first hostile encounters by Frodo and Sam are with Ringwraiths! - clearly not a level - approproate foe.
I intend to do a series of reviews of gaming fiction, but I may go back and include some of these related works as well, because they can be interesting and many of them are read by the same people who read gaming fiction. Considering the amount of ausdience crossover, I think I can justify some review crossover.