What is the relationship between mythology and literature?

Mythology was an early version of literature. Before everyone could write, people would tell stories. These stories were similar to Fairy Tales, and often had mythical creatures such as Mermaids, Unicorns and Trolls. Nobody surely knew that any of this was true, but as nobody could deny it, there was a possibility that it could be true. It was literature from Word of mouth, and many years later it was recorded, and these ancient tales are now what we know to be fairy tales.