In drawing the sometimes not-so-obvious lines between history, legend, myth, and outright fiction, King Arthur can be a useful example.
Yes, there really was a King Arthur. One of the earliest historians to mention him was Nennius, a Welshman who wrote around 796 A.D., by which time Arthur was already over three hundred years into the past. Nennius tells us that Arthur united the Britains, who missed the unifying if imposed influence of the Romans, against the Saxon invaders. Nennius contrasts Arthur's Christian manners with the savage attacks of the pagan Saxons.
The Romans left in the early 400's, and Arthur seems to have assumed political leadership around 452. There were several decades in which there was no unifying political influence in Britain, each town caring for itself only. Arthur was needed, because a unified defense had to be presented to the various Germanic tribes which kept invading: the Saxons, the Vandals, and Schwaben. Although Arthur worked with heroism, the Saxons ultimately took over the island.
Concerning the legends and tales about knights in shining armor, we can probably conjecture that Arthur didn't wear metal armor, might not have had a horse, or even the formal title of "king", and whatever castles he may have inhabited probably resembled simple, small, crude stone houses. He's not the Arthur of the fairy tales, but he played a more than imporant role in British history.