Q:

Is there a difference between 传说 and 神话

The internet doesn't give much advice on this one. They both seem to be nouns meaning myth, legend, folklore. Not sure if natives make a distinction between the two...?

A:

传说 : Legend (legendary tales. Some have reality base. Some don't.  Dragons exist is a legend, Bruce Lee in his prime was defeated by an unknown elderly man is also a legend)
神话 : myth (mystical tales involve gods and spiritual world)

A:

Is there a difference between "神话" and "传说"?
Is there a difference between "myths" and "legends"?
In the Chinese context, the former, 神话, like Greek mythology, involves stories of the fantastical exploits of gods and supernatural beings, like the Eight Immortals which may not have a grain of truth at all.
However, legends, 传说, as the 传 implies, involves generational transmission by word-of-mouth, (eventually written down), of stories which may have some truth at its core but with so much peripheral fantasy embellishment that the core of truth got carried away with the fantasy part and became myths, 神话, like the Monkey, Piggy, Sandy and Xuanzang in 西游记.
So here, in 西游记, we have a legend, (core of truth), of a real monk, Xuanzang, going to India to seek out Buddhist scriptures, but morphed into mythology by being accompanied by a Monkey god-king and two sidekicks.       

A:

As the character "神" shows, "神话" usually involves some kind of "神".
But "传说" does not require that.

