This thread is yet another example of a few people on MN having decided very quickly to disagree with OP and beat her up, and numerous others meekly following their lead without using basic logic and critical thinking.
Of course in an occupation where trust is paramount it is a major issue that someone is habitually lying. How can it not be? It's irrelevant why and how OP knows, because these are lies which could be found out at any time. Anyone within the organisation may meet colleague with her husband and son at any time, or may know someone who knows them well, or may have a child in the same school or attending the same activities as colleague's son. The point is that not only is she lying about the fact of, say, having twins, she seems to be making up extensive stories about the mythical twins and things she is doing with them.
These are all things that HR could easily check up on through public records, and probably should now the issue has been drawn to their attention.
The point is, of course, that OP can only say that she thinks it's not affecting work - she doesn't know. There has to be a real risk that someone who is lying and fantasising all the time will start carrying that over into her working life.
It's not necessarily a matter of getting her sacked, but it is a matter of asking for an explanation. If, as people suggest, there is a good one, the colleague should have no problem in giving it and all of this can be sorted out. But the company and HR should not be closing its eyes to it all and pretending it doesn't happen.