This is a common - and sadly mistaken - refrain of those who, for a variety of reasons, have decided to reject the clear teachings of the Bible. However, it is certainly not what the authors of the Bible believed: they knew and remained fully convinced that they were recording actual, historical events.
The Bible is the record of God's dealings with the human race. While nature and the inner workings of the human person testify to God's existence, it is only in the pages of his inspired, authoritative Word, the Bible, that we learn in particular of God and his plan to redeem us fallen, sinful human beings.
It should come as no surprise that there is a tremendous amount of evidence for the Bible's historical reliability. Archeology, the study of ancient writings (manuscripts), the study of prophecy, and eyewitness testimony all help to confirm the fact that the Bible is entirely trustworthy.
To offer just one example. It's been shown that it takes more than two full generations for a myth or legend to develop. The bare fact that the NT gospels (Matthew, Mark, Luke, and John) were written within a few decades of Jesus' birth, death, and resurrection in and of itself constitutes substantial evidence that the miraculous events recorded actually took place. If they had not, there would have been too many eyewitnesses still living who could/would have disputed them. (Baker Encyclopedia of Christian Apologetics)