Use literary when you want to indicate writing with high artistic qualities. Something doesn't have to be "literature" to be literary, but they are related.

Literary comes from the Latin litterarius, meaning "letters," as in letters of the alphabet. Think of literary writing as writing that explores the richness of language or even contributes to it, especially in a high cultural way. The clever rhymes you invented about your grade school principal's bathing habits made your classmates laugh, but that doesn't make them great literary achievements.

Definitions of literary

adj of or relating to or characteristic of literature

literary criticism”

adj appropriate to literature rather than everyday speech or writing

“when trying to impress someone she spoke in an affected literary style”
(of spoken and written language) adhering to traditional standards of correctness and without casual, contracted, and colloquial forms

adj knowledgeable about literature

“a literary style”
versed in literature; dealing with literature

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