drama with folklore

Arang and the Magistrate - it is chock full of fantasy elements and also a very good drama!

Legend of the Blue Sea - mermaid, modern

My Girlfriend is a Gumiho - modern 

Along with the Gods: The Two Worlds and sequels. It is movie (not drama), but very well done. It has some afterlife mythology.

• Black: male lead is possessed by a grim reaper
• Dear Herbal Lord: female lead is a fairy
• The Fairies Of Liao Zhai: an anthology series adapted from various stories from Strange Stories from a Chinese Studio
• Fairyland Lovers: male lead is a spirit doctor
• Fox in the Screen: female lead frees some foxes and becomes their master
• Frankenstein no Koi: male lead is Frankenstein
• The Ghost Bride: female lead tries to escape marriage to a ghost
• The Journey: male lead is a vampire
• Legend of Nine Tails Fox: an anthology tv show based around a fox clan, the stories are adaptations from Strange Stories from a Chinese Studio
• The Legend of White Snake: female lead is a snake
• The Life of the White Fox: male lead is a fox demon
• Mama Fairy and the Woodcutter: female lead is a fairy
• Mermaid Legend: female lead is a mermaid
• Moonshine and Valentine: male lead is a fox
• Nail Shop Paris: I'm hiding this info in a spoiler since as far as I can remember it wasn't revealed until later in the show. The female lead is a nine-tailed fox.
• New Strange Stories from Liao Zhai: an anthology series adapted from various stories from Strange Stories from a Chinese Studio
• The Story of a Woodcutter and his Fox Wife: female lead is a fox
• Surplus Princess: female lead is a mermaid
• Youkai Sharehouse: female lead lives in a house with spirits from Japanese folklore

And there are several series based on Hua Mulan if you search for Mulan on mydramalist. I would also highly recommend the American series The 10th Kingdom if you haven't seen it. It involves a parallel world populated by fairy tale characters.