Folklore is a story that is based more regionally. However, with the invention of printing presses, and later on radio, TV, and now the internet, many local folklore are now shared worldwide and get turned into legends. (I know, it gets confusing!) The purpose of folklore is often just to help us understand better the nature of mankind. Folktales are told outside what is known as our "true time" = the time you are in right now.
Folklore is sometimes considered gossip that's gone on and on and on about someone. In some cases, folktales can turn into sagas literally, as each generation feels a need to add their version or spin to it. This is why many folktales have wandered further from the original truth as the years have passed.
And (I could be wrong about this) there is a German reference in my sources to the word "Märchen" which I think means a folktale that does not have a happy ending? They jokingly refer to it as being "grimmer than a Grimm." A märchen has a moral, and is often felt to be true, but it might end with say someone dying for their true love. In folklore, motives are always assumed but never truly a fact because no one can really know a person's feelings. And often, the feelings of the teller are inserted into the tale, making it inaccurate each time it's told.
One of the cliché's of folklore is that there is no one "right version". All variations of a folktale (or even a folk song) have equal validity - as long as you trust the storyteller to be competent. A folktale can exist in more than one form: As a story told by someone, as a poem, as a play or as a song.
A good example of folklore is: How did something get started? Such as the origin of the name of a place. A realistic folklore is say how the Mississippi got it's name. A fantasy folklore is say how did the man in the moon get to be up there? And, is the moon really made of cheese and if so, which kind? ;)
In many folklore versions,
the older ones are often replaced with more popular ones if the current
presenter is popular. This is particularly true of folk songs and if the
folktale is a Disney cartoon or movie.