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Good point. More importantly, it sounds like the Zora aren't offended by seeing a mermaid. I would have to agree. Though, if all mermaids were land dwelling people wearing suits, I would think it would be addressed as such. The statements you provided suggest, to my eyes, that the Zora believe...

Seems to me that if mermaids were just an in universe cryptid/myth, being so close to what a Zora is, it could easily be in universe racism, akin to a monkey man. It's literally a fish person. I really don't want it to be anti-Zora racism. (I'm not saying that one does mean the other, just that...

Best we can go off of is what little we have in game, and it's not much. Link's Awakening is the only "living" mermaid that I am aware of.

Off the map? :shrug: [edit] Or, they already died off, but their imagery remains.

The title is basically the question at hand. Are mermaids real in the Zelda universe, and are they related to the Zora in some way? - We do see a mermaid in Link's awakening, which is a dream, so not definitive, in of itself. As an aside, I believe that everything in the dream was experienced...