The mythology of creatures in Heroes (Goblins and Co.).

Well, it doesn't really matter whether you draw from existing mythology or create your own, but if you do create your own, please make sure that all the creatures are logical and have a good design. Heroes 5 lacks both of these qualities.
And regarding the claim that no one has seen them: just because you haven't seen something doesn't mean it doesn't exist, but there are paintings, books, and other evidence that show what a mythological creature looks like, one way or another.