Fables Vol 12: The Dark Ages Written by Bill Willingham; Pencilled by Mark Buckingham; Art by Peter Gross & Andrew Pepoy, Michael Allred, David Hahn; Colour by Lee Loughridge & Laura Allred; Letters by Todd Klein (Vertigo Comics)
How the category is defined according to the official rules:
Best Graphic Story: A science fiction or fantasy story told in graphic form.
Further definition, from the Serialized works section:
Works such as TV series, comics and sometimes even whole novels are sometimes published in multiple parts making up a complete story arc. The individual elements of such a story arc are always eligible for their year of publication. However, voters may want to nominate a complete story arc. In such cases it is the publication date of the final installment of the series that counts for eligibility purposes.
Contents page of Fables Vol. 12 (numbers are page numbers):
Around the Town 9
Art by Michael Allred, Colour by Laura Allred
The Dark Ages
Pencils vie Mark Buckingham, Inks by Andrew Pepoy, Coulor by Lee Loughridge
Chapter One: Life in a Headless Empire 52
Chapter Two: Boxes 50
Chapter Three: Fabletown Unbound 68
Chapter Four: The Darkest Hour 86
Chapter Five: The Blue Horizon 104
Waiting for the Blues 129
Art by David Hahn, Color by Lee Loughridge
Return to the Jungle Book
Art by Peter Gross, Color by Lee Loughridge
Chapter One: Homeland Recovery 148
Chapter Two: The Jungle Book 154
Chapter Three: Mountbatten 159
Chapter Four: Mowgli for Dinner 164
Chapter Five: Home from the Jungle 169
So - stories contained within the collection, Fables Vol. 12, The Dark Ages = four.
According to the rules cited above, a complete story arc should be nominated.
What the nomination should look like, if due to proper application of the rules, only the eligible story arc - The Dark Ages, as listed on the contents page above - was considered:
Fables: The Dark Ages Written by Bill Willingham; Pencilled by Mark Buckingham; Inks Andrew Pepoy; Colour by Lee Loughridge; Letterer, Todd Klein (Vertigo Comics)
I knew something seemed off when there were so many names on the ballot, and when they had no inker listed, and knowing that Fables not infrequently has more than one story in a volume, but I couldn't be sure and so didn't like to say anything until I was able to check with my own copy.
It's pretty damning. And yet more evidence that, when it comes to Best Graphic Story, nobody knows anything. To be clear - I am applying the rules as they have been written. If even the Hugo administrators can't do it themselves, clearly they should be re-written into a form that they can actually work from without making mistakes.