The tradition of memorizing and telling stories is ancient, and it was long used as a way to teach children as well as entertain people. Unlike books, the listeners have an opportunity to ask questions and receive answers if the story leaves loose ends. This may seem rude to the modern world, but it was a way to help those telling the stories to refine them. It is one of the reasons this art has survived for centuries.
The stories told may be true, or they can be made up by the person relating the tale. In some cases, the audience has the opportunity to guess, and at other times the storyteller will let them know which it is. Truth is important if factual information is being relayed, but entertainment does not have the same requirements. As with any story, the audience should come away with a sense of satisfaction for a tale well told.