Legend has several related meanings. A legend today may be someone of noted celebrity, with larger-than-life accomplishments, whose fame is well-known. Another meaning of this word is a literary genre. In this capacity, the term is much-abused, used synonymously with myth, tall tale, and history. However, it makes more sense to use the term legend — as it is, in fact, often used — to name a type of literature that falls somewhere between myth, tall tales, and history and that otherwise has no name.
In this sense, legend differs from myth, if we understand myth to be focused on explaining natural phenomena, answering questions about why things are the way they are in the natural world, because legend is focused on individuals and their accomplishments. It also differs from tall tales, which focus on hyperbole — and therefore humor — and intentionally ascribe inventions and innovations to a hero to whom they do not belong for the sake of the story. Finally, it is separated from history by the fact that its content, once believed to have been true, turns out to be fictional. The heroes of legend in this sense, then, are fictional heroes or real people whose exploits aren’t quite what they’re made out to be, who were either so lifelike or so admirable that people wished they were real. This description fits the works and heroes typically associated with the genre.
The stories of King Arthur are legends in this sense. It is possible that the tales of this king are based on an historical figure who lived in the fifth or sixth century, but the stories have, there is little doubt, grown beyond the historical record, if there was one. Robin Hood, the legendary late medieval outlaw/hero, is another such: the man in the stories may or may not be based on a real person, but the stories certainly grew beyond the man, if there was a man. Boudicca or Boadicea, the first century British queen who led an attack against the Romans, was defeated, and reportedly ended her own life with poison, was undoubtedly an historical figure, but her life has been turned into legend, at least in some accounts.