It has elements of truth. Julie Powell's blog and Julia Child's life form the basis, but creative liberties may have been taken to make it more engaging for the audience.
No, Julia and Julie isn't a true story. Usually, such works are a creation of the author's imagination or draw from a combination of fictional concepts and loose inspirations.
In the 'Julie & Julia - True Story', there are several key elements. Firstly, there is the element of ambition. Julie's ambition to complete such a massive cooking task in a year and Julia's ambition to make French cooking accessible in America. Secondly, the role of food as a means of connection. It connected Julie to Julia, and also connected both of them to their respective audiences. Thirdly, the historical and cultural context. Julia Child's story is set in a different time with different cultural norms in the culinary world. Julie's story is more modern but still influenced by Julia's legacy. The way the two stories are intertwined is also a key element.