Folk literature refers to the cultural artifacts that can be committed to a written form, like stories or songs. The primary aim of folk literature is to preserve oral traditions. Characteristics of folk literature include dissemination through generations, fluidity, sociality, and orality the quality of being spoken.
At the most basic level, then, folk horror is rooted in the dark 'folk tale', in communal stories of monsters, ghosts, violence, and sacrifice that occupy the threshold between history and fiction.
Bela Lugosi might not have been the best, or even the first, but he is the quintessential Dracula. Bela Lugosi was a Hungarian actor who made women swoon with sexual longing when he put on the cape in the original Broadway adaptation of Bram Stoker's book.
