There are many theories that are put forward to explain stories about giants. These include that there actually was a race of giants, that the stories are recalling a now-extinct subspecies of hominid. We have also seen stories about giants justified by the idea that people had found mammoth skulls and then invented the idea of giants – thus creating the stories. We have also heard people put forward the idea that stories about giants are evidence of ancient alien visits.
These are theories (and we’re sure there are many others) to explain why diverse people have stories about giants in their oral traditions.
The question here is whether these are reasonable theories. Embracing these sorts of ideas has become an aspect of modern folk belief. The core folk belief at play here is that “all legends have an element of truth embedded in them.” There is no evidence that this is true; this is part of modern folklore. Theories about the origins of giant folklore may be fun to think about, but there is absolutely no evidence to reinforce them.
A first point: stories were not likely that widespread; those expressed in cultures speaking Indo-European languages likely came from a single common ancestor rather than from unique, diverse, and widespread traditions. Non-Indo-European-speaking cultures occasionally have stories about giants, but they are not necessarily as widespread as is occasionally asserted.
That aside, many (but not necessarily most) pre-modern folklore collections describe a giant or more than one giant playing a role in the creation of an aspect(s) of the world. These are what are known as etiological legends – narratives told to be believed that explained the origin of something.
Stories about giants typically involve times in a remote past or a remote location: people would not describe actually seeing giants in their own time – unlike elves/fairies/trolls/hidden folk/etc., which people believed it was possible to encounter. It was impossible for people to imagine that a giant was hiding nearby because they would be easily found out; it was easy for people to imagine elves hiding nearby.
The premodern process related to giants typically followed the following course: look at that enormous stone in that field; how did it get there? it would have taken the strength of someone who was enormous; a giant must have thrown it there, but since no one remembers that happening, it must have happened long ago. The folk believed that there were once giants, and so it was easy to see the consequences of their existence in the world around them.
Because traditional folk belief relegated giants to an ancient time, modern folk belief follows the following course: many ancient peoples had stories about giants; all legends have an element of truth within them; the stories must be linked by something that was real (because all legends must have something real behind them); therefore, there must have been a race of giant humans that may have been a subspecies of hominids or aliens or … fill in the blank with speculation.
Those lines of speculation are not theories resting on facts. Diverse people had stories about giants because some of these stories diffused with Indo-European languages. These and other stories reflect a natural process of people attempting to grapple with the origin of the remarkable world around them.