Well, here’s the evidence from Liddell and Short, the major Greek-English dictionary:
- tale, story, narrative , Od. 3.94 , 4.324 , S. Ant. 11 , etc.: in Hom. like the later λόγος, without distinction of true or false, μ. παιδός of or about him, Od. 11.492 : so in Trag., ἀκούσει μῦθον ἐν βραχεῖ λόγῳ (χρόνῳ cod. M.) A. Pers. 713 ; μύθων τῶν Λιβυστικῶν Id. Fr. 139.1 : in Prose, τὸν εἰκότα μ. the likely story , likelihood, Pl. Ti. 29d : prov., μ. ἀπώλετο, either of a story which never comes to an end, or of one told to those who do not listen, Cratin. 59 , Crates Com. 21 , Pl. Tht. 164d , cf. R. 621b , Lg. 645b , Phlb. 14a ; μ. ἐσώθη ‘thatʼs the end of the story ’, Phot.
After all, Homer and Hesiod (who were very nearly sacred authors) would not have used a word for ‘lie, fairy tale, made-up story’ to refer to the stories about the ancient Greek gods that they themselves believed in. Only later on do we get meanings like ‘fiction’:
- 2 fiction (opp. λόγος, historic truth ), Pi. O. 1.29 (pl.), N. 7.23 (pl.), Pl. Phd. 61b , Prt. 320c , 324d , etc.
- 3generally, fiction , μ. ἴδιοι Phld. Po. 5.5 ; legend, myth , Hdt. 2.45 , Pl. R. 330d , Lg. 636c , etc.; ὁ περὶ θεῶν μ. Epicur. Ep. 3p.65U. ; τοὺς μ. τοὺς ἐπιχωρίους γέγραφεν SIG 382.7 (Delos, iii B.C.).
- 4 professed work of fiction, childrenʼs story, fable , Pl. R. 377a ; of Aesopʼs fables , Arist. Mete. 356b11 .
- 5 plot of a comedy or tragedy, Id. Po. 1449b5 , 1450a4 , 1451a16 .