Anglo-Saxon mythology had no shortage of supernatural beings and monsters which were believed to make up part of the natural world. The Anglo-Saxons were pre-Christian, and practiced Pagan religion similar to the Scandinavian tradition. Based on surviving texts which describe Anglo-Saxon religion, supernatural beings and phenomena were believed to be a very real part of the world humans live in and experience. Some of these elements of mythology persist in the folkloric traditions of the British Isles today.
Monsters or supernatural beings may have represented fear of the unknown in the natural world. For example, Europeans long believed in terrible sea monsters that might gobble you up if you dared to sail the ocean. This could easily be a misunderstanding of large sea-creatures like whales, exacerbated by a fear of that which is seemingly endless and tumultuous. This same sort of fear likely conjured up beliefs about all of the unknowable or uninhabited parts of the world. Anglo-Saxons were fairly sedentary people who were not likely to travel far beyond their homes. A belief in beings such as elves and dragons gave an answer to the question, "What's out there?"
With the rise of Christianity in England, religious art reflected the belief that immorality could be reflected in the physical form. People (or beings) who were sinful might be depicted as monstrous.