I was wondering if I could comment on the discussion between Velorien and Bloody-TSI. It happens to touch on some subjects that I have an interest in.
The idea that "myth" means "something that isn't true" is a relatively recent accretion (19th century). Originally it simply referred to a legendary tale, one primarily concerned with the gods and their dealings with humanity. In the ancient world, myths were also considered "true," but there were different types of truth. What we think of as truth today is an empirical truth--a truth that can be argued, tested, and proven. Myths, however, spoke to inherent truths that transcended empiricism. I believe that this is what Velorien means by the possibility that myths can still be "true" even if they are not empirically true. That is, they speak to truths about the human nature and the human condition.
There is also a long academic tradition of associating language with creation. It is no accident that in the Christian Bible, for example, God speaks the world into existence. To put it in very rough and simple terms, language is a symbolic system devised by humanity not only as a means of facilitating communication, but as a very way of thinking. Thus language is essential to our perception of the world. (This can be best seen in the different ways that different languages classify and categorize reality. To give a very simple example, the perception of the colors blue and green differs in English and Korean (and Japanese, for that matter). What in English we call a green light is referred to in Korean as a blue light--but the actual color is the same.) Most people think of "reality" as existing as some abstract thing, but the truth is that, as far as humans are concerned, reality doesn't exist outside of our perception of it. Or, to put it in less solipsistic terms, one person's reality may be very different from another person's reality. That being the case, since perception of reality is in one sense also creation of reality, language is capable of creation as well. A lot of primitive magic, for example, revolved around the principle that you could make something true just by affirming it aloud. In fact, people still believe this today, to some extent. Any time someone tells you, "Don't say such horrible things!" they are following this principle. By saying something horrible, you are introducing the idea and making it a part of that person's reality. (There is even a Korean phrase that says, "words become seeds," meaning that just saying something can make it come true.)
Hmm. I guess that wasn't that "rough and simple" after all, was it? Sorry about that. I got a little carried away. I can only hope that someone finds this mildly interesting.
This sounds like semantics to me as what you are describing of the original definition is still describing elements that were not true or unproven, even though they were understood as true at the time regardless of these facts. The difference is they didn't recognize that and we do. According to our understanding of what you are describing, these myths were just as untrue then as they are now, so I'm guessing our definition changed as a result and takes precedence, especially since we are using it in the modern tense in accordance with our understanding of the word and stories behind it. When I asked if it was just an in-game myth, I was using the modern lexicon. In other words, I wanted to know if the myth was actually true or just viewed as true (like the historical lexicon as you described). The historical views of mythology are interesting though for sure ,especially since I used to be a believer in one because unfortunately they're still going strong today and I was indoctrinated.
What Deity Matrix said about myths is also somewhat untrue. A myth doesn't have to have any basis in factual events in history or defy natural explanation, but it certainly must contain at least one of those elements (I looked it up to make sure). Basically a myth must merely contain elements of fiction whether it defies reality (magic, gods, etc.) AND/OR simply lacks determinable basis in historical fact according to the modern lexicon. If at some point empirical evidence is found that substantiates it, it ceases to be a myth.
There were some other philosophical elements in your post about perception of reality, the difference in labels of colors among different cultures and things like that concerning their truth that I disagree with and could have discussed with you, but we probably shouldn't go too much further off topic.
Actually, it's the other way around: Velorien is using "myth" in the original, stricter sense of the term. You are using the more modern, looser sense. To put it another way, Velorien is using the term in its literary or folkloric sense, while you are using it in its general sense.
I would say that the original folklore definition was looser and that the modern definition is stricter, but that's also just semantics I suppose.