When I say history of Rome, it doesn't matter when really but let's pick Sulla's Civil Wars so we are all talking about the same thing.
The idea behind my question is that the people who experienced the Civil Wars probably knew more about them than we did. So did the people ten years later.
In my layman's vision though, it seems that after some time the knowledge faded away. As the years passed, people knew less and less about the events.
Now, with modern archaeology and anthropology, it seems that as the years pass we learn more and more about the past and that we know more than people in an intermediate time period.
I know this question doesn't really have a nice clean answer, but it is something I have though about and I wonder what some experts might have to say about it.
Does humanity's knowledge of events graph out like a U shape? Decreasing as we move away from the event and then increasing once technology improves?
Archeology isn't that great when it comes to information about singular events, its strength really lies in uncovering the everyday life. Yes, occasionally archeologists discover inscriptions or battle sites that cast a new light on our perception of events but often very significant events (whose historicity we have no reason to doubt) elude the archeological record altogether.
So maybe we have to distinguish different classes of knowledge:
Let's imagine a member of a Roman senatorial family in the 4th century who takes an interest in antiquities (not uncommon during that time as subscriptions from extant texts show) and who has acquired copies of the 7th and 8th decade of Livy (I don't think we have a record of them still being around at that time, the Periochae were made from an abridged version, but the possibility doesn't seem unbelievable either). He would very likely have a better knowledge of the events (what battles were fought? who sided with whom? who betrayed whom? ...) of Sulla's civil wars than we do.
But when it comes to the question of how people actually lived during Sulla's times (almost 500 years before our hypothetical reader's present) his knowledge would probably be not that great (maybe some systematic information from e.g. Varro, but mostly random tidbits picked up in this or that author) and his views would often be caught between false extrapolations from his own lifestyle (the surviving 4th/5th century commentaries do frequently underestimate the distance between their world and that of the author they discuss) and romanticizing idealization. These are areas in which by way of modern archeology we might have a clearer view than he does.