Detha, 87, is survived by three sons and a daughter.
Popularly known as "Bijji', Detha kept himself confined to his village Borunda near Jodhpur throughout his life, relinquishing a number of offers and opportunities.
Detha had over 800 short stories to his credit and gave a modern touch and identity to the folk tales of Rajasthan.
"He fondly documented them and converted them into the form of stories", said Vinod Vithall, a close associate.
Recipient of Sahitya Academy award, Detha was also nominated for the Nobel Prize for his contribution to folk tales and was conferred the Rajasthan Ratan award last year.
'Paheli', a movie based on his story "Duvidha", was the last film based on his works. Theatre director Habib Tanvir adapted Detha's story Charandas Chor into a successful play which was also made into a film by Shyam Benegal.
Ace directors like Mani Kaul, Shyam Benegal and Prakash Jha also brought his works on the celluloid screen.