Harry might initially be in shock. He could feel a mix of anger and helplessness. Maybe he'd try to hold back his magic out of fear of getting into more trouble with Vernon.
Vernon might be jealous of Harry's magical abilities. He could see Harry as a threat to his 'normal' family life and his authority in the household.
Well, perhaps Vernon might beat Harry out of his extreme dislike for magic. He could be enraged by some accidental magic Harry does at home and lose his temper completely.
It might be a fan who was really intrigued by the relationship between Harry and Vernon and decided to take it to an extreme in their writing. There are so many fanfiction writers out there, some write for fun, some to explore different character dynamics. So, it could be anyone really.
The wizarding world would likely be in shock. Harry is seen as a symbol of hope against Voldemort. His death at the hands of Vernon would be a huge blow. There would probably be a lot of anger towards the non - magical world for allowing such a thing to happen.
Petunia could be a great addition. Her relationship with both Harry and Vernon adds a lot of complexity. She could be the mediator or the one causing more trouble between them, depending on the plot.
In some fanfictions, Harry might cope by finding solace in his friends at Hogwarts. He could talk to Hermione and Ron about what Vernon does, and their support gives him strength. For example, they might encourage him to focus on his magic studies as an escape from the Dursley's household.
Maybe Vernon is jealous of Harry's magical abilities. He might see Harry as a threat to his 'normal' family image. Also, Vernon has always been a bully at heart and Harry, being an easy target in his house, becomes the victim of his pent - up anger.
One common theme is redemption. Often, Vernon is depicted as having a chance to redeem himself for his past bad treatment of Harry. Another theme is the discovery of common ground. For example, they might find out they both have a love for a certain type of food or a shared fear. And family is also a theme. Despite their differences, they are still family in a way, and fanfictions sometimes explore how that family bond can be mended or redefined.
Perhaps Dudley finally stands up to his father's cruel treatment of Harry. Maybe he realizes that Vernon's behavior towards Harry is wrong and uses his own physical strength or some clever ruse to get Harry out of a difficult situation Vernon has put him in.
Many in the wizarding community would probably be very critical. Fanfic is often a passion project for fans, and Vernon's motives of just making money from it would be seen as wrong. They might organize to stop him from selling the fanfic. On the other hand, there could be a few who are curious about what a Muggle like Vernon thinks about Harry and the wizarding world through his fanfics, so they might buy them just to see what's inside, but still be ready to condemn his actions.