The Founding of Rome is very much embroiled in myth.
Traces found by archaeologists of early settlements of the Palatine Hill date back to ca 750 BC.
This ties in very closely to the established legend that Rome was founded on 21 April 753 BC, which was traditionally celebrated in Rome with the festival of Parilia.
Two founding legends exist - Romulus and Remus and Aeneas.
Rather than contradict each other, the tale of Aeneas adds to that of Romulus and Remus.

King Numitor of Alba Longa was ejected by his younger brother Amulius. To do away with any further possible pretenders to his usurped throne, Amulius murdered Numitor's sons and forced Numitor's daughter, Rhea Silvia, to become a vestal virgin. (Vestal virgins were priestesses to the goddess Vesta and were expected to guard their virginity in the goddess' honour on pain of death.)
However Mars, the god of war became enchanted by her beauty and had his way with Rhea Silvia while she slept. As a result of this Rhea Silvia bore twins, Romulus and Remus.
An enraged Amulius had Rhea Silvia thrown into the river Tiber where she was caught beneath the waves by the river god who married her.
As the two boys had grown to men in the care of the couple, they were told of their true origins. True to their heroic status they raised an armed and marched on Alba Longa. Amulius was slain in battle and Numitor was restored to his throne.
The twins decided to found a new city close to where they had been washed ashore, caught by the fig tree. The twins disputed which hill their city should be built on, Romulus favouring the Palatine, Remus choosing another (possibly the Aventine).
Taking the auspices to read the will of the gods, Remus on his hill saw six birds, Romulus saw twelve. So it was decided that Romulus’ choice was the right one and he and his followers took to building their city on Palatine Hill.
Romulus took to marking the city's sacred boundary with a plough drawn by a white bull and a white cow. Remus however leapt over the furrow, either in jest or derision. This was an ill omen suggesting the city’s defences could easily be overcome. Remus was slain, either by Romulus himself or by one of his chief followers.

The sack of Troy is dated to around 1220 BC. To fill the years from Aeneas to Romulus the Romans therefore were required to produce a string of fictional Kings to make the tale work. This was done across all the generations with some ease from Ascanius, son of Aeneas to Numitor, grandfather of Romulus and Remus.

Add to this the influence of the Greeks who were settling southern Italy, founding cities like Cumea and Tarentum, bringing advanced civilization to the country, and you have a place with lots of potential. From the Greeks the Romans learnt fundamental skills such as reading and writing, even their religion is almost entirely derived from Greek mythology. i.e. for Jupiter write Zeus, Mars is Ares, Venus is Aphrodite, etc... If the Greeks settled to the south of them, then the Roman had the Etruscans to the north. Etruria was predominantly an urban society, drawing its considerable wealth from seaborne trade. The extravagant Etruscans were generally seen by the more hardy Romans to be decadent and weak. While being distinctly unique in their own right, the Etruscans too owed much of their culture to the Greeks. At around 650 to 600 BC the Etruscans crossed the Tiber and occupied Latium. It is through this, so one believes, that the settlement on the Palatine Hill was brought together with the settlements on surrounding hills, either in an attempt to fend off the invaders, or, once conquered, by the Etruscan master who sought to rule their kingdom via a structure of city states. It is at this point that the first known, rather than mythical, kings emerge