An urban legend is a fictional story rooted in modern popular culture. You can think of urban legends as today’s folklore—just like traditional folktales, they are based on real parts of culture and often real people; however, in most cases the details have been exaggerated, ultimately making the stories false. They can take the form of an elaborate joke or hoax, a rumor gone too far, unsolved mysteries and crimes, popular misconceptions or beliefs, and so on. Some urban legends may be completely plausible, while others may have supernatural elements that make them less believable or clearly not true. Either way, their truthfulness is always questionable, but perhaps also difficult to disprove.

In the past, legends were historically relevant and usually related to real human events (in one way or another), but hadn’t been proven or documented as having actually happened. So, throughout history, people had no way to prove whether a legend was true or false! What’s more, they were passed on verbally, slowly spreading and evolving for years, decades, and even centuries. But today, with the help of the internet and many other resources, urban legends are passed on quickly and easily, but it is also usually pretty easy to at least prove whether or not it has any real basis in fact. In this way, urban legends today are often easily “debunked” (proven false). Regardless of their truthfulness, some urban legends are silly and lighthearted, while others may actually be quite scary or disturbing.

The term “urban” doesn’t have anything to do with a story starting in the city. We use the word to help distinguish between older, classic stories, and those developed in modern society.

Taken from literaryterms.net