Novellas are back and hotter than ever. Not that they ever truly went away. Rather, publishers simply avoided novellas, saying it wasn't economical to release print editions of tales which were longer than short stories yet far shorter than full-length novels.
Thanks to e-publishing, that view has changed and novellas are booming. One of the best I've read so far this year is The Sorcerer of the Wildeeps by Kai Ashante Wilson.
This story follows the life of Demane as he leads a caravan across the magic-infused wildeeps. As a descendent of god-like beings who once lived on this perhaps-futuristic planet, Demane has powers and abilities beyond regular humans, who label him a sorcerer.
Except that things are not what they seem with Demane. Instead, the world Demane experiences may be merely proof that Arthur C. Clarke was correct and any sufficiently advanced technology is indistinguishable from magic. But that hardly reassures the people in the caravan, who both trust their lives to what they see as Demane's magic and are uneasy at the events around them which can't be explained.
That is the strength of Wilson's story — the things we can't explain. Wilson does an amazing job using his beautiful language to open up an ambiguous world for readers where what we believe to know isn't always what truly exists. Yet the powerful characters and world-building in Sorcerer of the Wildeeps pulls you through this uncertainty until you have no choice but to accept that in fiction, as in life, we often only learn what happens in hindsight.
Highly recommended. You can read an except of Sorcerer of the Wildeeps here.