Folktales are adventure stories filled with action and conflict with human or animal characters. They have common narrative motifs such as supernatural adversaries or helpers. They have tasks or quests to complete, and there is magic and marvels. They have common themes where the good are rewarded and the evil ones punished or true love will conquer any obstacle. Finally, the setting usually takes place in some far distant past.
(Through the Eyes of a Child: An Introduction to Children's Literature by Donna E. Norton)