Mark Ross came close to the mark (but no cigar) when he said:

History is what happened, folklore is how people reacted.

Actually, it is truer to say:

The actual events are what happened; history is the way the events are remembered and interpreted by those who claim competency in such matters (which changes as time goes on); and folklore is the way the events are interpreted, remembered, and/or misremembered by the people.

Dave Oesterreich