We've never told our children that make-believe things are real. They have encountered "Santa Claus" occasionally in children's programs, so they just think of him as just another character in the lineup. I don't think they realize that some people really truly believe in these make-believe characters, but I'm sure they'll understand when they're older.
I have to give a nod to 22B on this front.
We're debating whether we'll adopt the Santa story for DS21mo. I'm on the fence. The magic of the fantasy is quite fun while it lasts. However, I remember being devastated at 5 at having been lied to by my parents. I had, the day before, defended my beliefs to older children and analogized belief in Santa to belief in God. Cue 5-year-old existential crisis...
Christmas holds deep religious meaning for us, so I'm considering a more ecclesiastical Christmas narrative for our family with a possible St. Nicholas and/or Epiphany tie-in.
