Avalon is Kings Isle's variation on the Arthuian Legend Cycle, from old western Europe, beginning very early in the medieval period. In fact, Arthur is characterized as a bear, which is a reference to the earliest King Arthur stories, where he was called Artorius in the Roman/Latin, and is associated with the very ancient bear god common in Celtic and Britton pre-Medieval stories.
Folklore, definitely, and of the most misty and ancient of the human past.