This question was asked of me on another site, but I thought the question and my answer pertinent here. If you feel you have something to add to help clarify the distinctions discussed, please do. The topic is rather broad and I've merely tickled its belly a little.

“Do fairytales exist or are they a fallacy?”

This question is ambiguous, but I think I know what is being asked. First, I’ll answer the question as asked: Yes, fairy tales exist. I have an entire collection of them in my library. One can find them at the local public library. One can purchase them from various bookstores and online.

Now, I think what is being asked is if fairy tales are true and the answer to that is, NO. They are not true. They are stories of fiction, some may contain a moral message or a life lesson, but all are fiction. Frequently, fairy tales employ a metaphorical style and supernatural beings such as elves, witches, pigs, wolves, etc. Magic is frequently used. When these tales become long and are laden with supernatural themes, they become what is called Epic or High Fantasy. There appears to be no specific set of requirements for this class other than that they contain elements of fantasy to some extent and that they be longish works or series. The Stand, by King, is an example.

Myths and legends may appear or be employed in the telling of a fairy tale, but they are distinct from fairy tales and are different from one another. Here’s how that works: We start with a presumption that a legend has some foundation in historical fact. That the legend may have had its start in reality such as real people, places, times, and/or events. How these stories turn into legend is through exaggeration, romanticization, and/or the addition of fictional elements, making the story somewhat ‘larger than life.'

A myth, on the other hand, is a form of symbolic storytelling. A story that has no foundation in fact/truth/time/characters. Myths are used to explain the ‘inexplicable’ in a way accessible to the people contemporary to the time of the telling/writing. These stories attack issues such as the meaning of life, the origin of life, the mechanics of the Universe without the knowledge science provides, etc. The methods used in telling mythical stories include parables, personification, and allegories.

All of these words (fairy tale, fantasy, myth, and legend) tend to be used interchangeably in ordinary discourse, but for authors, historians, and academics, they are all quite different things. A proper and more in depth look at these forms is too complex and long for here. What I have said is severely truncated and is admittedly generalized.

Fable: Talking Animals/Teach a Lesson/Usually Short/Few Characters

Fairy tale: Make Believe (fiction)/Happens Long Ago/Has Magic/Happily Ever After/Conflict with an Evil Person or creature or both.

Legend: Contains real events and/or a real person’s unusual life story that has been distorted through exaggeration and embellished heroic actions.

Myth: Story that provides reason/explanation for events. Some myths explain natural events such as rainbows or seasons and others explain how the world began. Myths about people and gods explain why people do things. They all provide lessons about good and bad behavior.