Even if Livy isn't. Livy conflates myth with sort of remembered history. So it starts with Aeneas includes Romulus+Remus, Horatius Cocles, ... on through the rape of the Sabine women. Like the Aeneid, it is pretty much Roman state propaganda.

Ahem, permit me to defend poor Livy. The early history of Rome was basically fairy tales, which includes the first 10 books of Livy. Livy's account was not great but it was certainly immensely popular through the Renaissance and far beyond.

The later books are far better. The account of the 2nd Punic war is as good as any history I have every read. The descriptions of the main characters are like great paintings; the story of the invasion and near destruction of the Romans is riveting. I also love the language--there are turns of phrase that are hard to capture in English translations like Hannibal's "more than Punic perfidy" (perfidia plus quam punica) that must have delighted and inspired his Roman readers. Livy did not just write history of the war; he described a clash of civilizations.

Yes, popular. However, one of the lessons I remember from Classics classes at Berkeley was that (outside of Tacitus) you should take anything the Romans say about their opponents with large doses of salt. Victors write the histories and the Romans sure wouldn't take the trouble to tell the other side of the story, especially about the Carthaginians. Cato comes to mind.

Tacitus is the singular exception. He's exalted by Germans for Germania and Agricola has the immortal line,

  To ravage, to slaughter, to usurp under false titles,
  they call empire; and where they make a desert,
  they call it peace.

I kind of rank Livy with Herodotus who'd never let facts or especially lack of facts get in the way of a good story. Tacitus I rank with Thucydides.

I don't disagree with your view of Livy, especially the early parts (books 1-10). The 2nd Punic War is more factual but still like the fables of the earlier volumes in the sense it's first and foremost a ripping good story. I first read Livy's account of Hannibal burning and pillaging down the Val di Chiana in Italy while sitting on a hill overlooking his march. It was part of his successful plan to enrage the Roman Consul Flaminius and entice him into an ambush at Lake Trasimene. You could look out over the flat valley and imagine the smoke rising up where the Romans could see it easily. Reading history does not get much better than that.

Incidentally I believe that in Germania Tacitus was holding up a mirror to Rome so the bias goes the other way The praise of the German tribes was a hit on his own citizens. For example, the memorable inference in Section 2 that nobody would leave Italy for the awful weather, formless land, and sorry agriculture of Germany unless they were natives was implicitly a criticism of the effete Romans.

In Livy's defense, he doesn't seem to actually believe in these fairy tales, often packing them in constructs like "it is said" or offering two explanations for things, one the more popular myth and one a more plausible explanation.

Taking into account that Roman historians generally didn't care that much for facts, and that Livy wrote his Ab Urbe Condita because it was commissioned by Octavian (i.e. he was kinda obliged to make the history of Rome look good), he was actually a pretty decent historian.

Doesn't mean I love Livy, though - reading his Latin is an inhumane torture (I hate Latin)