I don't really see how it contradicts itself. She clearly states that they are immogrants and settlers who came to El Nido resently (That in mind being the Termina residents). Other than that, Arni was always there. Termina's construction could have drawed the Demi humans away from that main island and on to Marbule and Guldove.
As for the Dragon God, it may not be a God, but it literally is the Dragon whom may resemble the force of a God. You have to remember, the Dragon God was the combination of all 6 elements, combined into one body from the power of the planet.
Steena says there are more than one, and that is true, since each one has their own element, and combine to form the true Dragon God, one that has power over all of nature.
The simple misunderstanding the the thing with the Flame. FATE sealed the Dragon God, splitting it up into it's 6 seperate selves. But see her, the Dragons sealed off FATE from the rest of the islands by putting that coral around it and creating the pearly gates.