Kids between 2 and 8 lie to test people
They are testing the 'All Knowing' parents, and adults around them.
They don't what things are and how to identify them.
Kids between 8 and 12 lie to show people they are special
They are insecure and are developing their ego.
They still don't know fact from fiction or how to identify most things.
Kids between 12 on up lie to protect themselves or others
We all do this, to what extreme though, will dictate how others will think about us.
We lie to keep people happy with us, to avoid trouble, to cover embarrassment or inadequacy, or because we don't have a clear distinction between the facts and fiction.
The times to take action against lies is when they cause harm.