Legendary characters only become legendary if they fill a need in people's minds. For example, Robin Hood would not be popular if we did not feel that the rich abuse the poor. So why Arthur?
When the modern form of the Arthur legend appeared with Geoffrey of Monmouth in the early 11th century, Arthur is portrayed as something of a national hero. He is a native Briton fighting against the Saxon invaders. This would have resonated with people who were native English people (although many were descended from the Saxons) who had just been invaded (1066) by the Normans.
When the Arthurian legend took off again, with Thomas Malory in the late 1400s, Arthur was more of a heroic and moral king than a national hero type. By now, England had entered a period in its history where its kings were known for selfish actions that were harming their people. The desire at such a time for stories of a king who cared about the people would have been strong.
There is both a beauty and a necessity to legends, for they romanticize and preserve a time in the history of a country. These legends give a people a better time to remember than, perhaps their own, providing them something in which they can take pride.
That legends have an important place in a country's culture is underscored in Mark Twain's satire, "A Conneticut Yankee in King Arthur's Court." In this novel, an American businessman is transported back in time to the Age of Chivalry, but through his desire to make everyone productive and to show profits, he brings ruin to all the beauty of the period.
It is proof of the delight people took in the romantic tales of the Age of Chivalry that the legends come from several countries. The earliest sources were from the Celtic storytellers of Wales and Brittany--there is, though, a written paragraph in Latin by Nennius in the 9th century--and then, as previously mentioned Geoffrey of Monmouth wrote them down; not long after Monmouth's work, which was translated into Latin (Historia Britonium). Later, a writer in the 12th century named Walter Map romanticised the tale into Norman French prose since this was the language of the court of England at that time. Other writers from Wales, England, France, Germany, Italy, Spain, and even Scandanavia perpetuated the legend. In medieval times when there were few amenities and diversions for the common people, the tales of maidens in distress, bold and honorable knights, evil beings, magical happenings, and love transported people to a much needed respite from their hardships. And, even though the common people in England had done no noble deeds, vicariously they could experience them as a fellow countryman of Arthur and his court of "merry olde England."
When in the history of a nation are dark periods, which due to lack of registrations, we have no accurate data of the period, then the imagination of people working to create legendary heroes, protectors of the community. These legends may have its origins in reality, but storytellers added their contributions intime and developed the story. Today, historians can only make speculations based on various sources.
It is clear that while these stories become a national mythology that develops as the writers, artists and the authorities encourage, preserve and create some artifacts which belong to that myth . Known example is the representation of the Round Table of Winchester Castle. These representations were used by chivalric orders or by monarchs in the ceremony, which claim their origins in that legendary period.