Parody, as a literary genre, is an imitation of a particular writer, artist or a genre, exaggerating it deliberately to produce a comic effect.
Parody imitates or exaggerates a subject directly to produce a comical effect. Satire, on the other hand, makes fun of a subject without a direct imitation. Moreover, satire aims at correcting shortcomings in society by criticizing them.
Literary Examples of Parody
Example 1:
Shakespeare's “Sonnet 130” parodies the Petrarchan conceit.
My mistress’ eyes are nothing like the sun;
Coral is far more red than her lips’ red;
If snow be white, why then her breasts are dun;
If hairs be wires, black wires grow on her head.
Unlike Petrarch's Laura, Shakespeare's "Dark Lady" does not have starry eyes, coral lips, or a snow-white complexion. Poking fun at the Petrarchan clichés, Shakespeare breathed a new life into the English language.
Example 2:
Swift’s Gulliver’s Travels