The Dragons in Freedom Planet are based on the dragons from East-Asian mythology, resembling the commonly depicted snake-like dragons with four legs, long tails, mustache-like whiskers and horns on their heads. Sometime before they were stranded on Avalice, they became anthropomorphic and smaller in size, but still slightly taller than the average Avalician while still retaining the long tails, whiskers and horns.
The Dragons not only possess high physical power, intelligence and are said to be faster than the average Avalicians. Due to their chimera-like nature, they are capable of mix-breeding with other species, allowing them to inherit various animal traits. For example, Water Dragons have fish-like traits, such as fins that allow them to breathe underwater and swim more efficiently.
Due to the century-long breeding with the Avalicians, the present day Dragons have lost many of the visual traits the Ancient Dragons had, but still retain the horns and/or claws, while some male Dragons have the mustache-like whiskers. Genetic defects from birth have also occurred - for instance, Lilac's fin ears are undeveloped, leaving her mostly deaf and in need of hearing aids. She is also incapable of breathing underwater, though she is still able to swim and hold her breath for an extended period of time, far longer than Carol & Milla combined.
Earth Dragons are shown to have brown bodies and golden horns. They have little variation in appearance.
Water Dragons are based on fish and other aquatic life, with their bodies being blue (or light purple) and their ears resembling fish fins. As of the present day, Lilac & Merga are the only remaining Water Dragons in existence; with Lilac being the last Half-blooded Water Dragon and Merga being the last Pure-Blooded Water Dragon.
At first, the Dragons were not always native to Avalice, as they first came to the Planet aboard a starship and crash landed long before the events of Freedom Planet. After wasting countless years trying to no avail in finding a way back to their homeworld, the Dragon ultimately decided to use their technology to help the Avalicians survive and prosper, condensing their energy reserves into a physical relic for the Planet to use; a relic that would later be called the Kingdom Stone. The Dragons continued to live on Avalice, settling in a region now known as Pangu Lagoon and mix-breeding with the native Avalicians, eventually passing into legend.
The events of the Dragons' arrival to Avalive had become legend and are common knowledge to the present day Avalicians, who often refer to them as "The Ancient Dragon of the Before Time". During the events of Freedom Planet, Lilac explains to Torque that a long time ago, Dragon came to Avalice and mixed with their ancestors, and Carol stating that their were also huge Dragons like the ones seen in movies. During the negotiations, Mayor Zao told Team Lilachis version of the legend: being about a "large Dragon soaring across the sky in a ball of fire". Captivated by it's power and beauty, the ancestors decided to build Three Kingdoms in it's honor: Shang Tu, Shang Mu & Shuigang. Afterwards, the Dragon transformed into the Kingdom Stone.
Later on, Lilac was exploring the caves of Pangu Lagoon in search of clues to defeat Lord Brevon and his army. In her search, she encounters a Robotic AI called Pangu, who attacked her in the form of a holographic Dragon. After the fight, she shows Lilac a pre-recorded message from a Dragon Scientist. In the message, it is revealed that the Dragons respected the wishes of the Avalicians and allowed their influence to pass into legend. Knowing there will come a time when the truth must be told, the Scientist recorded a message into Pangu, for the future descendants of Avalice to see.