FAQ About Troy
It's quite possible that Troy existed, but archeologists still haven't found it. They know about Troy from Homer's Iliad and the Odyssey, both of which were written a thousand years before the city was thought to exist. The Iliad describes how King Priam of Troy and his family escape their burning city with the help of a Trojan named Sinon who kills Ajax in order for them get safely out of town. While some aspects of these stories have been criticized (Ajax is actually killed by Odysseus) there doesn't seem to be any reason why they were made up--these are usually accurate character descriptions according to ancient historians, so people generally do think there was a city called Troy.