Folk Tale- a simple story about human or animal characters that has been passed down by word of mouth from one generation to the next. Folk tales are usually set in the distant past. They are told in every country around the world. Examples of folk tales are fairy tales and legends. Legend- a folk tale that explains something that really happened or tells about someone who really lived. Legends often mix fact and fiction. They reflect the values of the people in the stories. Or Legend- a simple story about human or animal characters that has been handed down by word of mouth from one generation to the next. Legends are usually set in the distant past. They are told in every country around the world. Legends explain something that really happened or tell about someone who really lived. Legends often mix fact and fiction. They reflect the values of the people in the stories.