I agree with
TheBlueReptile.
Skyward Sword seems to loosely suggest that the Parella eventually became the Zora. I don't have much to add to this theory aside from what the game already hints at: They are both aquatic races, they are both sentient, and the have a leader (Faron) who appears to resemble a Zora somewhat, etc. There may have been a need to adapt to a rapidly changing environment, and/or to evolve due to a sudden need to migrate to the north. Additionally, the time span between SS and
Ocarina of Time is unknown, but it seems to be large enough to accomodate the evolution of Parella, similar to the undetermined time span between OoT and
Wind Waker in the whole Zora→Rito situation. That leads me to think that Faron may have somehow contributed to their transformation as well [using magic?].
In spite of all that, I really would have liked to see the Zora in SS. It would have made more sense if they fought in the Hylian War, instead of the Parella, as I find it very difficult to imagine them in a battle against Demise and his forces. They appeared to have no fighting ability in SS, and their small, frail bodies would have sustained damaged from even weak attacks. Zoras, on the other hand, seem to be more than capable in battle and have even displayed fighting ability throughout the series; the best example of this appearing in TP.
Oddly enough, that little fact lead me to believe that the Parella are indeed the Zora; at least as far of their place in the legend goes. What I mean is the
legend of the Hylian War might have been passed down, and the depiction of the Zora ['s participation in the war] may have changed along with it over the ages. This can't be too far of a stretch, as there are many other things in the series that could have been altered as well - as most
legends are. However, the chances that this isn't the case is just as probable. In my opinion, it is best to assume that Parella→Zora for the sake of avoiding any confusion.
Also, how epic would it have been to see the Zora in SS's graphics?! [noparse]

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