When Your Child Blurs Fantasy and Reality: A Gentle Guide to Nurturing Honesty

When Your Child Blurs Fantasy and Reality: A Gentle Guide to Nurturing Honesty

Persistent Lying and Reality Distortion: My child lies about everything and seems to believe their own stories.

Nov 6, 2025 • By Inara • 14 min read

Episode artwork
When Your Child Blurs Fantasy and Reality: A Gentle Guide to Nurturing Honesty
0:00 7:53 RSS Download MP3

Your four-year-old just told you an elaborate story about seeing a unicorn in the backyard. Or maybe they insist they didn't eat the cookie, even though there are crumbs on their face and chocolate on their fingers. And here's what makes it even more confusing: they seem to genuinely believe what they're saying.

If this sounds familiar, I want you to take a deep breath and know something important. You are not alone. This is one of the MOST common experiences parents have with children ages four and five. And what's happening isn't what you might think.

In this guide, I'm going to share what the Magic Book and I have learned about why young children blur the line between fantasy and reality, what the research tells us about this beautiful developmental stage, and most importantly, how you can gently nurture honesty in your child without shame, punishment, or worry.

Understanding What's Really Happening

When children are four and five years old, something absolutely WONDERFUL is happening in their brains. Their imaginations are blooming like the most magnificent cosmic garden. They're discovering that they can create entire worlds in their minds. They can be astronauts, they can be dragons, they can make up stories that feel as real to them as the ground beneath their feet.

And here's the beautiful part that many parents don't realize: their brains are actively learning to distinguish between what's real and what's imaginary. But here's the key word: learning. They're IN THE PROCESS. They haven't mastered it yet. They're practicing.

So when your child tells you they saw a unicorn, or that they didn't eat the cookie when the evidence is right there on their face, they might genuinely be confused about what happened versus what they wished happened. Their imagination is SO powerful right now that it can feel as real as reality itself.

This Isn't Deception—It's Development

I know it can feel worrying when your child seems to believe their own stories. You might be thinking, are they going to grow up to be dishonest? Do they not understand the difference between truth and lies? Should I be concerned?

The answer is no. What you're witnessing is actually a sign of healthy cognitive development. Your child's brain is growing in exactly the way it's supposed to grow.

What Research Tells Us About Lying and Truth-Telling in Young Children

Child development experts have studied this extensively, and what they've discovered is fascinating. Lying behavior in young children is actually connected to important cognitive milestones.

Children's lying is associated positively with their cognitive development in terms of their understanding of others' minds and executive functioning.

— Dr. Victoria Talwar, Child Psychologist, McGill University

Let me break down what this means in everyday language.

Theory of Mind Development

When children start to understand that other people don't know everything they know, that's called theory of mind. And that's a HUGE developmental milestone. It means they're beginning to understand that you can't read their thoughts, that you have your own separate mind with your own separate knowledge.

This is beautiful, complex thinking. And sometimes, in that learning process, they experiment. They test out what happens when they say something that isn't true. They're not trying to be manipulative. They're literally learning how minds work, how communication works, how truth and stories are different.

Executive Functioning Growth

At this age, children are also developing something called executive functioning. That's the part of the brain that helps with impulse control, with thinking before acting, with remembering rules. And that part of the brain? It's still growing. It won't be fully developed until they're in their twenties.

So when your child blurts out a story that isn't true, they might not have had time to think, wait, is this real or did I imagine this? Their brain is still learning to pause and check.

The Fantasy-Reality Distinction

Research shows that four and five year olds are in a transitional phase where they're actively learning to distinguish fantasy from reality. According to the Raising Children Network, children at this age love make-believe play and are discovering the difference between what's imaginary and what's real. This learning process can sometimes lead to statements that blur this boundary.

The good news? This is temporary. This is normal. And this responds beautifully to gentle, patient guidance.

Gentle Strategies to Nurture Honesty

You can nurture honesty in your child while also honoring this developmental stage they're in. Here are strategies that the Magic Book and I have seen work wonderfully:

1. Reframe Instead of Accuse

When your child tells you something that you know isn't true, take a breath. Remember: this is development, not deception. Instead of saying "you're lying," which can create shame, try saying something like:

  • "That sounds like an amazing story! I wonder if that really happened or if that's something you're imagining?"
  • "Wow, what a creative idea! Is that something you wish happened, or something that actually happened?"
  • "I love your imagination! Let's talk about what's real and what's pretend."

This helps them start to distinguish between the two without making them feel bad about their powerful imagination.

2. Celebrate Truth-Telling

When your child does tell you the truth about something difficult—like admitting they broke something or made a mistake—respond with warmth and appreciation:

  • "Thank you SO much for telling me the truth. That was really brave."
  • "I'm proud of you for being honest with me."
  • "I love that you told me what really happened. That helps me understand."

This teaches them that honesty feels good, that it brings connection instead of punishment.

3. Avoid Setting Them Up for Lies

If you see cookie crumbs on their face, instead of asking "did you eat a cookie?" (which might tempt them to lie), try saying:

  • "I see you found the cookies. Let's talk about asking first next time."
  • "It looks like you had a cookie. Next time, please ask me before taking one."

This removes the pressure to lie and goes straight to the learning moment.

4. Model Honesty Yourself

Let them see you admitting when you make mistakes. Say things like:

  • "Oh, I told Grandma we'd call her yesterday and I forgot. I need to call her right now and apologize."
  • "I made a mistake when I said we'd go to the park today. I'm sorry. Let's figure out when we can go instead."

Children learn so much more from what we DO than from what we SAY.

5. Be Patient with the Process

Remember, learning to distinguish fantasy from reality, learning to be consistently honest—these are skills that take YEARS to develop. Your child is right on track. They're learning. And you're teaching them beautifully.

Stories That Can Help

In The Book of Inara, we have beautiful stories that bring these concepts to life for your child in gentle, age-appropriate ways:

The Emperor's New Clothes

Perfect for: Ages 4-5

What makes it special: This classic tale directly addresses truth-telling and the courage it takes to speak honestly when others are pretending. The brave child who speaks the truth models honesty in a gentle way that helps children understand why truth matters without shame or fear.

Key lesson: When the child speaks up and says what they truly see, even though everyone else is pretending, children learn that honesty is brave and important, and that speaking truth helps everyone.

After-story conversation: You can ask your child, "How do you think the child felt when they told the truth? Why do you think the grown-ups were pretending? What happened when someone finally spoke honestly?"

Explore This Story in The Book of Inara

You're Doing Beautifully

My wonderful friend, I want you to hear this clearly: Your child is not broken. They're not manipulative. They're not going to grow up to be dishonest. They're four or five years old, and their brain is doing exactly what it's supposed to be doing. It's growing, it's learning, it's experimenting with imagination and reality.

Your job is not to punish this out of them. Your job is to gently guide them, to celebrate their magnificent imagination while also teaching them about truth, to be patient with the process, and to trust that they're learning.

And you know what? You're doing that beautifully. The fact that you're here, reading this, seeking to understand your child better—that tells me everything I need to know about the kind of parent you are. You're thoughtful. You're caring. You're doing this with so much love.

So take a deep breath. Trust the process. Celebrate your child's powerful imagination. Guide them gently toward honesty. And know that the Magic Book and I are here with you every step of the way.

With all my cosmic heart and starlight,
Inara

Related Articles

Show transcript

Hello, my wonderful friend! It's me, Inara, and I am SO happy you're here with me today.

You know, the Magic Book and I have been noticing something lately. Many parents are reaching out with a concern that feels really worrying. They're saying things like, my child lies about everything, or my child seems to believe their own stories, and I don't know what to do.

And I want you to know something right away. If this is happening in your home, you are not alone. This is actually one of the MOST common experiences parents have with four and five year olds. And there's so much beautiful development happening here that we need to talk about.

So grab a cozy cup of tea, settle in with me, and let's explore what's really happening when your little one blurs the line between fantasy and reality. Because I promise you, this is not about deception. This is about something absolutely WONDERFUL happening in their growing brain.

First, let me share what the Magic Book has taught me about this age. When children are four and five years old, their imaginations are blooming like the most magnificent cosmic garden. They're discovering that they can create entire worlds in their minds. They can be astronauts, they can be dragons, they can make up stories that feel as real to them as the ground beneath their feet.

And here's the beautiful part. Their brains are learning something absolutely crucial right now. They're learning to distinguish between what's real and what's imaginary. But here's the thing, my friend. Learning means they're IN THE PROCESS. They haven't mastered it yet. They're practicing.

So when your child tells you they saw a unicorn in the backyard, or that they didn't eat the cookie when there are crumbs on their face, they might genuinely be confused about what happened versus what they wished happened. Their imagination is SO powerful right now that it can feel as real as reality itself.

Now, let me share what the research tells us, because this is fascinating. Child development experts, including Dr. Victoria Talwar at McGill University, have studied this extensively. And what they've discovered is that lying behavior in young children is actually connected to cognitive development. It means their brain is growing in really important ways.

When children start to understand that other people don't know everything they know, that's called theory of mind. And that's a HUGE developmental milestone. It means they're beginning to understand that you can't read their thoughts, that you have your own separate mind. This is beautiful, complex thinking.

And sometimes, in that learning process, they experiment. They test out what happens when they say something that isn't true. They're not trying to be manipulative. They're literally learning how minds work, how communication works, how truth and stories are different.

The Magic Book reminds me that at this age, children are also developing something called executive functioning. That's the part of the brain that helps with impulse control, with thinking before acting, with remembering rules. And that part of the brain? It's still growing. It won't be fully developed until they're in their twenties.

So when your child blurts out a story that isn't true, they might not have had time to think, wait, is this real or did I imagine this? Their brain is still learning to pause and check.

Now, I know this might feel concerning. You might be thinking, but Inara, I need my child to be honest. I need to be able to trust them. And I hear you, my friend. Of course you do. Trust is so important.

And here's the beautiful news. You can nurture honesty in your child while also honoring this developmental stage they're in. Let me share some gentle strategies that the Magic Book and I have seen work wonderfully.

First, when your child tells you something that you know isn't true, take a breath. Remember, this is development, not deception. Instead of saying, you're lying, which can create shame, try saying something like, that sounds like an amazing story. I wonder if that really happened or if that's something you're imagining.

This helps them start to distinguish between the two. You're teaching them the difference without making them feel bad about their powerful imagination.

Second, celebrate truth-telling. When your child does tell you the truth about something difficult, like admitting they broke something or made a mistake, respond with warmth. You might say, thank you SO much for telling me the truth. That was really brave. I'm proud of you for being honest.

This teaches them that honesty feels good, that it brings connection, not punishment.

Third, avoid setting them up for lies. If you see cookie crumbs on their face, instead of asking, did you eat a cookie, which might tempt them to lie, try saying, I see you found the cookies. Let's talk about asking first next time.

This removes the pressure to lie and goes straight to the learning moment.

Fourth, model honesty yourself. Let them see you admitting when you make mistakes. Say things like, oh, I told Grandma we'd call her yesterday and I forgot. I need to call her right now and apologize for forgetting. Let me show you how we make things right when we make a mistake.

Children learn so much more from what we DO than from what we SAY.

And fifth, be patient with the process. Remember, learning to distinguish fantasy from reality, learning to be consistently honest, these are skills that take YEARS to develop. Your child is right on track. They're learning. And you're teaching them beautifully.

Now, let me tell you about a story that the Magic Book holds that I think will help so much with this. It's called The Emperor's New Clothes. Have you heard of it?

In this beautiful classic tale, there's an emperor who is tricked by some clever weavers. They tell him they're making him the most magnificent clothes, but really, they're not making anything at all. And all the adults in the kingdom pretend they can see these beautiful clothes because they're afraid to speak the truth.

But then, a child, a brave, honest child, speaks up and says what they truly see. The emperor isn't wearing anything at all.

And you know what's so beautiful about this story? It shows children that telling the truth is brave. It shows them that honesty helps everyone. It shows them that even when it feels scary to be truthful, truth is what sets us free.

After you read this story with your child, you can talk about it together. You might ask, how do you think the child felt when they told the truth? Why do you think the grown-ups were pretending? What happened when someone finally spoke honestly?

These conversations are SO valuable. They help your child think about truth and honesty in a safe, story-based way.

You can find The Emperor's New Clothes and so many other beautiful stories in The Book of Inara app. Every story is crafted with love to help children navigate these big developmental moments.

My friend, I want you to hear this. Your child is not broken. They're not manipulative. They're not going to grow up to be dishonest. They're four or five years old, and their brain is doing exactly what it's supposed to be doing. It's growing, it's learning, it's experimenting with imagination and reality.

Your job is not to punish this out of them. Your job is to gently guide them, to celebrate their imagination while also teaching them about truth, to be patient with the process, and to trust that they're learning.

And you know what? You're doing that beautifully. The fact that you're here, learning about this, seeking to understand your child better, that tells me everything I need to know about the kind of parent you are. You're thoughtful. You're caring. You're doing this with so much love.

So take a deep breath. Trust the process. Celebrate your child's magnificent imagination. Guide them gently toward honesty. And know that the Magic Book and I are here with you every step of the way.

Thank you so much for being here with me today, my wonderful friend. Until our next adventure together, I'm sending you and your little one so much love and starlight.

With all my cosmic heart, Inara.