I remember it being argued that what may have fueled the stories of Dragons was the discovery of dinosaur bones. Think about it, pulling giant serrated teeth out of the ground as you are plowing your field, or stumbling on a claw. It would certainly put the fear of something into a peasant farmer.
As time goes on oral tradition changes stores. So from a single tooth a story about an entire skeleton could be woven in time.
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The stores certainly change. Some of them used to sell furniture, now they sell home appliances.
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