The Sex Pistols were very much a real band - there has been a big myth built up around Mclaren and how they were his puppets but it just isn't true. The reason John Lydon ended up leaving was precisely because he wouldn't do what he wanted. Jones and Cook were just rock and rollers after a good time but were no idiots. Sid was MMs attempt to mould the band and failed spectacularly. Things like the Bill Grundy incident had absolutely nothing to do with MM and going on tv and acting like that was setting yourself up to be public enemy #1. They were attacked several times and Lydon still bears the scars.
No I am afraid people are guilty of believing a lot of myths about them.
Lydon wrote the lyrics to the songs. McLaren loved to imply that they were a stage managed boy band but the reality was different.
The thing about the Grundy incident was that Lydon was hardly involved at all.