Legend, Legendary Story
noun
When people transmit a theory through the ages, it can turn into a legend, or legendary story. Kind of like how the "theory" of King Arthur's sword turned into the legend of Excalibur.
でんせつ
This is a jukugo word, which usually means on'yomi readings from the kanji. You just have to remember that 伝 is read as でん in this case. Just imagine yourself sitting in your den (でん) as you get cozy and listen to this theory about a great legend.
アイルランドの伝説のヒーローと言えば、誰を思いうかべますか？
When you hear "a legendary Irish hero," who comes to mind?
お前めちゃくちゃモテるな！マジで伝説的だよ。
Girls love you, man. You are legendary, seriously!
伝説によると、この海にはワニカニが住んでいるそうです。
According to a legend, there is WaniKani in this ocean.