I'm listening to an audiobook called The History of the Ancient World by Susan Wise Bauer and when discussing the ancient Egyptians she often references Herodotus. She usually has a disclaimer that the information might not be perfect, but I know he is one of our major sources on this information. Sometimes though he is talking about people that lived thousands of years before him. Was this information generally accurate or more of a legend that got handed down to his day?
Herodotus' description of Egypt is definitely not perfect. It ranges from a very detailed description of mummification which is in accordance with what we know about how the Egyptians mummified bodies (2:86-89) to some bizzare descriptions of animals, such as flying snakes and describing hippopotami as having a horses' mane and visible tusks and cloven hooves (2:71).
As another example his passage on Egyptian customs is plainly just an inversion of what hos readers would find typical (men pee sitting down, women standing up; they go to the bathroom indoors and eat outdoors; women carry out business while men stay at home) (2:35) and is thus not reflective of ancient Egyptian society in any major sense .
A lot of his history of various kings is a similarly mixed bag. For example he correctly identifies Khufu (in Greek Cheops) as the builder of the great pyramid, and then goes on to say that Khufu was generally tyrannical and built the pyramids with the forced labor of his people (sort of true) (2:124). He describes the way that stones were lifted up each level of the pyramd under construction with levers (probably not true or physically feasible) (2:125). He also states that he had hieroglyphic inscriptions on the pyramid translated and that they record how much the food of the workers cost (not true, the inscriptions are most likely the names and titles of the pharaoh) (2:125).
He also relates a lengthy story linking an Egyptian pharaoh to the story of the Trojan war (2:116-120), as well as genealogies linked to various characters from Greek myth or places in the Greek world. I like to speculate that these are just the kind of stories that Egyptian guides would tell tailored for Greek visitors.
So in total Herodotus' knowledge of Egypt is mixed but probably reflective of the fact that he actually went there or talked to many people who had spent time there.
When he discusses Egyptian history, Herodotus is mostly dead wrong. An example of this is in book 2, when he discusses the reign of Sesostris at some length. He claims that the Egyptian priests showed him written records of 330 monarchs, but that most of them were "in no way distinguished and left nothing to commemorate their reigns" (2:101), with the exceptions of Moeris, the female ruler Nitocris (probably entirely mythical), and the aforementioned Sesostris. The idea that nearly all pharaohs left nothing to commemorate their reigns is a fairly remarkable assertion in itself, of course. Sesostris supposedly conquered a large empire, extending well into Europe, and while he may have been based partly on one or more real pharaohs, the account of his deeds in Herodotus is, at best, greatly exaggerated. It would be quite accurate to describe him as "more of a legend that got handed down to his day."
Herodotus also claims that 18 of the 330 pharaohs were Ethiopian, which seems to reference the 25th Dynasty. There are, therefore, some traces of the truth in his accounts, but it seems that accurate historical information about ancient Egypt was likely simply unavailable to Herodotus, and quite possibly nonexistent at the time.