All reasonably sane adults know that there is an important difference between fantasy and reality. This is something that each child learns gradually, slowly adjusting his or her world (complete with imaginary friends, ghosts, monsters under the bed) until it more or less coincides with the rest of society’s understanding of reality. Imagination in children doesn’t generally have to be encouraged; it’s the default position of human beings to create stories in our brains, even long after we know what’s “real” and what isn’t “real”.
Children’s understanding of the difference between fantasy and reality is, to a great extent, inherent - most children will recognise that Bugs Bunny, for example, is a rabbit, but not a real rabbit. They understand that Tellytubbies don’t exist in real life. When you tell children about Santa Claus or the Easter bunny, they may believe in the fantasy for a period of years, in the same way they may believe in fairies or superheroes. These literal beliefs, however, will fade gradually over time, as older children spill the beans or a more cynical understanding of the acceptable edges of reality become apparent.
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