In the first stanza of "Ode on a Grecian Urn," John Keats establishes the context of his poem. The Grecian urn has a story told in the painted decorations spanning round it. A common practice was to frame the urn or the story on the urn in a leaf motif. Images of urns are available at Webshots.com and Fotosearch.com. If you look at these, you'll see the leaf motif (repeated paintings of leaves) on both, though each urn has the motif presented in very different ways (and the two stories painted round the urns are also very different from each other).
A legend is a story. A fringe is a decorative border or an outer edge of something. The expression "leaf-fringed" refers to a decorative border or an outer edge of leaves. The word "haunts" can mean to remain consistently (like a painting on an ancient Grecian urn). So now we have a different understanding of Keats' lines 5 and 6: These lines may now be paraphrased as: What story is perpetually told in a leafy border motif around this urn's shape? Is it of gods, mortals or both? And we can also see that poetry says very much using fewer words in comparison to prose (non-poetry).
I believe Keats uses this phrase to emphasize that he does not really know what the scenes on the urn were meant to represent.
In the next few lines, he twice asks whether the figures on the urn are mortal or gods. So it is important to note that the words you mention are part of a question. He is asking if the leaf fringed (because there are trees and such painted on the urn) figures are part of a legend and if so, what legend.
So he uses these words (and the questions around them) to show that he is really not sure what the scenes on the urn are meant to represent.
It might be helpful, too, to think about other possible meanings of the word "legend" in John Keats' poem "Ode on a Grecian Urn." The preceding lines do seem to point toward this standard meaning -- see the references to the "sylvan historian" and the "flowery tale" -- but the word can refer to more than just ancient stories. "Legend" can also mean something written, something inscribed, or something to be read. The power of poetry often likes in the rich layerings of meaning.
In the famous Grecian urn of Keats, there is simplicity of shape in the urn itself but also a "leaf-fringed legend." The leaf-fringed legend tells of the fact that complexity and individual interpretation is part of the aesthetic beauty that Keats is describing.
The juxtaposition of the two concepts adds to our interpretation of the “work” as a whole.
The figures on the urn are referred to as a " leaf fringed legend" for several reasons.
- One: the person can not understand what the figures represent.
- Two: The urn does not disclose if the figures are gods or not.
Keates use of imagery is a credit to his ability to take an ornamental object and give it thought. He communicates with the urn as if the figures can respond to him. He questions it for answers but gains none.