Local folklore plays a crucial role in storytelling by providing cultural context, enriching the setting, and adding depth to the narrative through the incorporation of myths, legends, and traditional beliefs. It helps create a sense of place and history, offering readers a glimpse into the unique heritage and traditions of the community where the story is set. Folklore can also serve as a source of inspiration for plotlines, character development, and thematic elements, adding richness and complexity to the overall storytelling experience.