In my post introducing the Strigoi I showed the inn patrons panic in the belief that there was a vampire out to get them. While the creature was a dangerous one, knowing that it wasn’t a vampire saved the adventurers a lot of grief. Imagine going out to face a ‘vampire’ armed with holy water, cloves of garlic, holy symbols, and wooden stakes, only to end up against a nest of stirges?
Something I’ve noticed in various adventures is NPCs being way too accurate when describing the local boogie. How many villages know the difference between hobgoblins and orcs? Or a Dragon and a Wyvern? Are the ghosts in the cemetery really ghosts, or will-o-wisps? What's the difference between an an ogre and a hill giant to a peasant? Or an ogre and a troll for that matter? Is the witch up on the glen really a druid, or is she a foul necromancer or just an old lady who prefers to live alone?
Isn’t it more likely that the villagers will only know that something bad attacked, and farmer Jim-Bob was ripped apart? They’ll blame whatever the local or historical monster is, even if there isn’t any evidence.
That isn’t even factoring in that locals may have a local name for the bad guys. What if the local goblin tribe wears redcaps? What if they've never seen the beast, but call it Grendel? Or Smaug? Or just "It"? There could even be a taboo about naming or describing it. If it's an intelligent monster that's good at sneaking, keeping the locals in fear could be even better than killing them all!
My point is, don't just presume that your quest giver knows that their talking about! And to DMs, don't always be clear about the threat is!