The dragon of the Bible is largely a reference to a fearful aquatic monster (Job 41:1-31), now extinct and in a symbolic fashion, to the Devil (Revelation 12:3,9),(Revelation 13:2,4,11),(Revelation 16:3),(Revelation 20:2). The ancient dragon mythologies are probably founded in these realities. Legends about dragons abound through the ancient world, dating from thousand of years before Christ, and persisting into the 20th century. The dragon figures prominently in the mythology of the Oriental peoples, is deified in the Taoist religion and was the national emblem of the Chinese Empire. Few places have celebrated the dragon as long as China has. The Chinese dragon is described as having the head of a camel, horns of a deer, fiery eyes and a long beard. Its ears are like those of a cow, its paws like the tiger's and its claws were sharp like an eagle's. Its neck was serpentine; and had a belly like a frog with scales like that of a carp.
The Roman legions inscribed the dragon on their battle standards. The Norseman (Vikings) adorned the prows of their ships with dragons. The Celts and Teutonic tribes which conquered England depicted dragons on their shields, and the dragon appeared on the battle standards of English Kings as late as the 16th century. The red dragon still adorns the armorial bearings of the Prince of Wales (Funk and Wagnalls New Encyclopedia).
A fearful sea creature (Psalm 74:13-14; 148:7). In these passages the dragon is identified as an awesome sea creature. Isaiah 27:1 connects the dragon with the leviathan which is the fire breathing sea monster of Job 41. Most commentators interpret these references as a crocodile or a whale or poetic license. Strong Concordance defines leviathan as "the crocodile or some other large sea monster". This is an interesting description, because the crocodile is "not" a large sea monster! Though many mock such an idea, I believe that leviathan is an extinct fire breathing dinosaur which is described in detail for us by God in Job 41 and which is probably the basis for the ancient tales
To believe that the dragon, behemoth, leviathan and satyrs are actual creatures is honoring to the Bible because they are described as such therein, and a literal interpretation is not contrary to any known scientific fact.
The dragon is not a figment of the imagination but a real creature that have been found in the fossil record. In 2006, Dracorex hogwartsia which paleontologists called the fossil skull found because it had a long muzzle with spiky horns. In a Stanford University press release, "The skull looks strangely familiar to anyone who has studied dragons! Dracorex has a remarkable resemblance to dragons of ancient China and Medieval Europe".