The prevailing opinion among the majority of academics is that Atlantis is first and foremost a myth, created by Plato as allegory and political commentary.
It is not true to say that a myth is a complete fabrication. On the contrary, a myth often has its beginnings in a real event. To that end, most academics readily see Atlantis as probably being inspired by real events such the demise of the Minoan culture, or the end of cities like Helike and Pavlopetri, that is very different to those locations actually being Atlantis, which they contend does not and never has existed.
Central to these ideas is a thorough, contextual assessment of Plato's other works and the politics of the time in which he lived. However, the pursuit of the legend of Atlantis has also left a colorful trail in its wake. As such, Atlantis has shone a light on the wants and desires of the historical times in which it was pursued. For example, the reaction to Olof Rudbeck's publication of Atlantica in Sweden in the 1600s, in which Rudbeck attempted to place Atlantis in Sweden as part of a nationalistic agenda.
The notion that Atlantis is a myth is by no means a modern idea. For example, Giuseppe Bartoli, the Italian scholar of the 1700s, saw the Plato Atlantis story as a veiled warning to Athens of a possible Athenian civil war.
Critias was never finished, but Benjamin Jowett argues that Plato originally planned a third dialogue titled Hermocrates, and John V. Luce goes further arguing that Plato, after describing the origin of the world and mankind in Timaeus and the allegorical perfect society of ancient Athens and its successful defense against an antagonistic Atlantis in Critias, would have made the strategy of the Greek civilization during their conflict with the Persians a subject of discussion in the Hermocrates.
Classical scholar Alan Cameron asserts on page 124 of Greek Mythography in the Roman World that:
It is only in modern times that people have taken the Atlantis story seriously; no one did so in antiquity.
However, study of ancient commentaries reveal this statement to be demonstrably false. For example, in 330 AD Arnobius the Elder wrote of Atlantis as accepted Fact, and in 550 AD Cosmas Indicopleustes not only wrote of it as a real place, but placed it in the Atlantic Ocean.
Alford, Alan F. The Atlantis Secret, Eridu, 2001.
Ellis, Richard. Imagining Atlantis. New York: Vintage, 1999.
Fritze, Ronald H. Invented Knowledge. False History, Fake Science and Pseudo-Religions, Reaktion Books, 2009.
Hall, Manly Palmer. Atlantis. An Interpretation. Los Angeles: Philosophical Research Society, 1976.
Jordan, Paul. The Atlantis Syndrome, History Press, 2004.
Vidal-Naquet, Pierre. The Atlantis Story. A Short History of Plato's Myth, University of Exeter Press, 2007.