Retro RPG: Ars Magica
Ars Magica is a role-playing game set in 'Mythic Europe' - a historically-grounded version of Europe and the Levant around AD 1200, with the added conceit that conceptions of the world prevalent in folklore and institutions of the High Middle Ages are factual reality. In this setting, Faeries actually do steal lost children, Demons cause disease and crop failure, Angels help the righteous, and dragons and other Magical creatures are real (though perhaps forgotten or hidden). In 3rd edition, to tie the game into the World of Darkness line, this was reality because of the beliefs; other editions distance themselves from this interpretation, simply taking place in a world where those beliefs happen to be true.
The game was originally developed by Jonathan Tweet and Mark Rein-Hagen, with its first edition published in 1987.