Atlantis is a myth, invented by Plato and probably based on some actual historical events - the similarity between Atlantis and ancient Crete is obvious. Since Plato was a great mythmaker, his myth survives even today.
"Myth" means an explanation of some permanent element of reality by a story, usually of its origin. Mythic kind of thinking is quite different from philosophic thinking, and Plato knew how to used the older way when the new rationalist thinking would not work.
Plato has invented many other myths, eg the Ring of Gyges, which is the basis of the Lord of the Rings and "Invisible Man" of Wells.
http://en.wikipedia.org/wiki/Ring_of_Gyges
Modern science fiction is not mythic, since the mythic way of thinking is quite rare and disparaged today. If it happens, it is a shameful secret, not a conscious art.
For people who use mythic thinking, the difference between fact and fiction are not the same as for us.
The older fantasy replaced myth after the end of the mythic thinking. Even a comparison of Eneid to Iliad shows the difference between the rationalised gods of Virgil and mythical gods of Homer. The gods of Virgil are the fundamental forces of the universe, and their human features are more a matter of tradition and artistic presentation.
However, the fantastic elements never constituted a separate genre. They appeared in different genres, as knightly romance, fairy tale, gothic novel, lost-world story etc. All those genres were different from modern fantasy since they never created separate fantasy world, never cut off themselves from traditional folklore, and never created separate fantastical "rules" of the world.
Early authors of modern fantasy, like lord Dunsay, are nearer that model. On the other hand, William Morris and Tolkien, and to lesser extent R.E.Howard, gave rise to the modern fantasy genre. This genre has actually fairly strict rules, and is much less fantastic than old fantasy, where you could find wonder without the need for tiresome explanation.