Folktales are stories passed on from one person to another by word of mouth. These tales were not written down, but existed only in the memory of mankind. It is only now, as the tradition of oral story-telling is giving way to books and television, that such tales are being collected and written down.

Many folktales seek to explain the world around us.
Some such stories are:

Why the Sky is So High
A folktale from Bengal, India
Why the Sea is Salt
A folktale from Karelia

Sometimes stories grow up around real people and places.
One such tale is that of:

Dick Whittington and His Cat
An English folktale

Folktales often centre around favourite character types.
One such type is the clever old woman:

The Miserly Old Woman
A folktale from India
How the Old Woman Got Her Wish
A folktale from India

Myth and folklore often overlap.
In India, there are many stories about the god Ganesh which could be myth but are more folktale:

The Two Sisters-in-Law
A folktale from India
To Vishnu's Wedding
A folktale from India