Prehistoric Advanced Civilizations (industrialized)

it is also possible that such technology like this may have come from a culture like the atlantians, whom were a land culture not some water breathing species of human

the myth was most likely created by treasure hunters finding items on the sea floor where the island had been submerged.

given the island was a natural barrier to raiders and it was sufficiently distant to smaller pirate ships, while having a fairly well advanced social culture & government meant it could fight off those that would destroy its technology.
The sudden disappearance of the entire island, culture & most of its people, then compared its technology to be that of living gods.
giving rise to a super human ability.
given that there was no real understanding of how the earth works it would have seemed perfectly reasonable to conclude at the time that an advanced city that was underwater with all sorts of gold & jewels would have been inhabited by water breathing humans, whom for some reason or another found something better to move to some time ago.
It's possible that unicorns poop rainbows.