Ghosts, goblins and wraiths

The solitude of the english moors is a fertile breeding ground for legends of ghosts and mysterious happenings. One story tells of a ghostly apparition who patrols the byways of the moors and of strange disapearances of travelers caught out on a moonless night. It was such a night as two LDS missionaries drove their van from a late night meeting when they came upon a lone bicyclist cloaked in black, riding toward them on the opposite side of the road. They passed and traveled a short distance before their curiousity prompted them to turn around to have another look. As they neared the same spot, there was the mysterious rider again coming toward them. They proceeded to where they could turn around and retraced their course. This time the road was empty. Where had the traveler gone? Was it the ghost?
The truth was revealed days later as they related thier story to a local family. "That is not a ghost," they were informed. He is a man who rides his cycle along the road in the solitary late evening hours and composes crossword puzzles. He has such a mind that he can keep the puzzle in memory until it is complete at which time he returns home to put it to paper.
I like the legend of the ghost. What spawns these tales of ghosts, goblins, trolls and other unearthly creatures? Were they used to discourage wayward youth from staying out into the wee hours? Another legend comes down through many generations telling of wicked "Lady Howard" who likewise travels the lonely paths of Devonshire in her carriage drawn by headless horses. Travelers who accept a ride are never seen or heard from again. The legend follows:
"There was once a very wicked woman called Lady Howard, or more familiarly the Old Lady, who now every night for her sins rides a coach made of bones from Fitzford to Okehampton Castle. As the clock strikes twelve, she starts from Fitzford Gateway in her coach of bones drawn by headless horses; in front of the carriage runs a sable hound with one eye in the middle of his forehead. Arrived at Okehampton the hound plucks a blade of grass (or in some versions three blades), and the cortege returns to Fitzford, where the blade of grass is laid on a certain stone. This is Lady Howard's penance, and it will last until every blade of grass in Okehampton Park is plucked, or the world ends." -"Lady Howard of Fitzford", Mrs. G.H. Radford, read at Barnstaple, July 1890. [reprinted from Transactions of the Devonshire Association for the Advancement of Science, Literature and Art, 1890. - xxii. pp. 66-110]