I suppose if you look back to your early childhood you accept everything people tell you and that includes a heavy dose of irrationality - you're told about tooth fairies and Father Christmas and things.
There may be fairies at the bottom of the garden. There is no evidence for it but you can't prove that there aren't any so shouldn't we be agnostic with respect to fairies?
I believe in everything until it's disproved. So I believe in fairies the myths dragons. It all exists even if it's in your mind. Who's to say that dreams and nightmares aren't as real as the here and now?