Fossil is a version control system built around blockchain.
Wikipedia defines "blockchain" as
"a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data..." (1)
By that definition, Fossil is clearly an implementation of blockchain. The blocks are "manifests" artifacts. Each manifest has a SHA1 or SHA3 hash of its parent or parents, a timestamp, and other transactional data. The repository grows by add new manifests onto the list.
Some people have come to associate blockchain with cryptocurrency, however, and since Fossil has nothing to do with cryptocurrency, the claim that Fossil is build around blockchain is met with skepticism. The key thing to note here is that cryptocurrency implementations like BitCoin are built around blockchain, but they are not synonymous with blockchain. Blockchain is a much broader concept. Blockchain is a mechanism for constructed a distributed ledger of transactions. Yes, you can use a distributed ledger to implement a cryptocurrency, but you can also use a distributed ledger to implement a version control system, and probably many other kinds of applications as well. Blockchain is a much broader idea than cryptocurrency.