The short answer
Helike was a real city in Achaea on the Gulf of Corinth, destroyed in one winter night in 373 BCE by a powerful earthquake and a surge from the sea.
Helike was a leading city of Achaea on the southern shore of the Gulf of Corinth, famous for its sanctuary of Poseidon Helikonios. On a winter night in 373 BCE it was destroyed by a powerful earthquake followed by a surge of water from the sea. Ancient writers say no one survived. Ten Spartan ships anchored nearby were lost with it.
Pausanias, writing in the second century CE, says the earthquake "swallowed up, without leaving a trace for posterity to see, both the buildings and the very site on which the city stood," and that the sea then covered all of Helike. He adds that "the ruins of Helice too are visible, but not so plainly now as they were once, because they are corroded by the salt water." Strabo reports that the geographer Eratosthenes had been told of a bronze Poseidon standing underwater, a danger to fishermen's nets.
Ancient authors blamed the disaster on the anger of Poseidon, whose sanctuary the people of Helike had reportedly violated. Modern geologists see a textbook case of an earthquake on an active fault, possibly with coastal subsidence, liquefaction and a local tsunami. Recent fieldwork has also found evidence that the area was struck by earlier disasters, including a buried Early Bronze Age settlement.
For centuries searchers looked on the seabed. In 2001 the archaeologists Dora Katsonopoulou and Steven Soter found remains of the classical city buried under sediment on land, in what had once been a coastal lagoon. Because Plato wrote the Atlantis story only a little over a decade after Helike vanished, many scholars think its fate helped inspire his sunken island.