Thus the Cyclops came to Be

Its long been theorized that our illustrious ancestors stumbled across bones whilst farming and building. Some of these bones would no doubt have been from dinosaurs or mammoths or some such. This was brought home in 2003 when archeologists discovered the bones of a deinotherium giganteum whose skull has a large opening for the nasal cavity...a single eye in the forehead so to speak. Thus the cyclops.

"The idea that mythology explains the natural world is an old idea," said Thomas Strasser, an archaeologist at California State University, Sacramento, who has done extensive work in Crete. "You'll never be able to test the idea in a scientific fashion, but the ancient Greeks were farmers and would certainly come across fossil bones like this and try to explain them. With no concept of evolution, it makes sense that they would reconstruct them in their minds as giants, monsters, sphinxes, and so on," he said. 

National Geographic