It’s not lying, it’s called make believe [1]. Children play this way all the time. It’s a healthy part of development. Adults play along with Santa Claus, the Easter bunny, and the tooth fairy. When kids get older and figure it out, they generally have fond memories of it. The only cases I’ve heard of where it was upsetting was when somebody else spoiled it for them, just like how people spoiled the end of the 6th Harry Potter book.
Adults do it all the time as well, when we consume fiction. It feels good to escape our current reality and inhabit another, magical reality, if only for a while. It’s a healthy thing to do as long as it doesn’t lead to a breakdown in our relationships and other aspects of our lives.
I'm really more and more convinced that each and every human group has such foundations ("myths"), and that the larger the group, the larger the distortion between the myth and reality.
Adults do it all the time as well, when we consume fiction. It feels good to escape our current reality and inhabit another, magical reality, if only for a while. It’s a healthy thing to do as long as it doesn’t lead to a breakdown in our relationships and other aspects of our lives.
[1] https://en.wikipedia.org/wiki/Make_believe