This book examines how four dominant myths—Magic, Madness, Heaven, and Sin—shape the global discourse on Artificial Intelligence and distort the development of technology policy. By framing AI as a mysterious entity, an existential threat, a utopian savior, or a moral scapegoat, these narratives obscure the reality of AI as a statistical tool . This mythological thinking leads to "policy hallucinations," where legislators create regulations that address science fiction scenarios rather than tangible harms such as algorithmic bias, labor displacement, and the erosion of democratic oversight. The work dissects the "Policy Machine"—the institutional pipeline spanning academia, media, and bureaucracy—to demonstrate how hype and panic result in resource misallocation and governance whiplash. Finally, it proposes a blueprint for mature AI governance rooted in democratic realism and three core principles: Accountability (treating AI as a commercial product to establish liability), Proportionality (prioritizing evidence-based, risk-proportional interventions), and Durability (adopting technology-neutral, principles-based regulations).