User blog comment:FairyRaven/Exceeds and Earth Land Counterparts/@comment-4933386-20120820113034/@comment-904888-20120820114332

Sugarboy knowing it is simple: as long as someone knows about it, it could be just passed along to him, such as from Faust,

The bigger question is: How did ANYONE in Edolas KNOW what a 'Dragon' is, since it is implied to Hughes that he didn't know what a Dragon looked like, simply calling the Dragon hallucination from Natsu as simply 'Monster' rather than referring to it as a Dragon. Sure, Droma Anim is called 'Dragon Rider', but it was a machine, could have been built by anyone else.

My theory is that the Edolas/Earth Land connection doesn't just exist in recent times, but goes back far (I will not speculate on the origin of this connection, this is for another day), and perhaps a curious Dragon Slayer of old entered Edolas, and possibly found that DS magic had much more significant effect (albeit completely removed from that of Earth Land), and this was noticed by the natives, and the Dragon Slayer and its powers became their local Legend. Only recently perhaps have Edolas learned to open and close Anima portals at will, allowing magic to slowly flow through the portal.

Also, it could also be as simple as having an intelligence network across the worlds.