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It is entirely possible there is a city of Atlantis. The "myth" began back when the Greeks were around, often mentioned in Plato's work. The Greeks worshipped multiple gods, often called Greek Mythology. It's possible that all of these beliefs they had might have come from somewhere partially true like, say, an alien species with technology for more advanced then theirs at the time. Their technology would have been viewed as magical and godlike, and Atlantis could have been some sort of resting place or city for these godlike creatures.

Or it could have been a city that had been flooded and sunk. Either works.

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