It’s not that I’m in some kind of denial that my children won’t come to learn that we as parents are the magic makers but what makes Christmas so special for us is not just the magic that comes from these things but the old familiarity, love and tradition that we enjoy year after year.
In my own life I came to appreciate the importance of keeping up traditions as life dealt several blows to our circumstances.
We used to always go to the ILs for Christmas but that long trip became a logistical nightmare once we had three DCs and all of their presents to take into account. The ILs had a tradition of Christmas Eve Mass, a big family dinner, and opening of family gifts on Christmas Eve, which we continued when we started having Christmas at home. exH and I divorced and the family home had to be sold, but I felt that keeping up the Christmas tradition in our new home might help tide the DCs over the upheaval, which it did. As the DCs got older and started earning money, we began to have our own family gift exchange on Christmas Eve, melding the old with the new.
When it came to talking to them about Santa Claus, I always assumed that I would tell my DCs the truth at an appropriate time. That time, I assumed, would be the day they came to me and asked me. So in turn they asked me and I told them, and swore them in turn to secrecy both at home and in school. They were aged from 6.5 to just under 8 when they either heard whispers in school or started to think rationally about flying reindeer/ children living in homes without chimneys.
However, one DC never asked me and seemed to be heading to the ripe old age of 11 still not questioning her beliefs. I mentioned this casually to her teacher, who told me that she had noticed both in this particular DC's class and the class she had had the previous year that several children spoke confidently and without a trace of irony about Santa Claus. Apparently this DC's class and the year before hers was full of tactful children because nobody was taken aside by their peers and told The Truth (so no side dish of scorn either, thankfully).
I was a little concerned all the same that one day someone would say something hurtfully, but she eventually approached me herself about age 10.5 and I told her it was me all along. She was genuinely astonished and couldn't understand how I had hidden presents for five children or put them out under the tree overnight without waking everyone for all these years. Clearly (1) capable of formulating decent questions based on observed reality, and (2) a very heavy sleeper.
She was sort of tickled to think about the subterfuge, it seemed, and off she went, only to return with a question about the Easter Bunny, and then about half an hour later with, 'And the Tooth Fairy????' I still don't know if this was an elaborate performance on her part or a genuine case of a penny dropping ever so slowly 
. This particular DD has an unusual brain... From then on she entered into the spirit of the Christmas Eve fun including pouring out a little measure of brandy and leaving out a mince pie for 'Santa' because her younger sister still believed and I had asked her not to breathe a word.
I think it's important to encourage and support children's magical thinking and dalliance with fairy tales and other stories connected to fantasy as long as it lasts. Children's grasp of concrete reality develops very gradually, emerging through many stages from infancy on - all the way to old age really. There is no reason whatsoever to skip steps in the gradual process, sticking to encyclopedias as reading material for instance and eschewing fantasy that might encourage them to believe that animals can talk and drive, or whatever.
Even as a child grows out of early childhood, there is nothing to be gained by reminding them they are 'just' playing - for instance, at age five, that they are not really a lion or a pilot or a pirate or a teacher. Just because you are in school doesn't mean you have to give up processing experience in certain ways. Children pick up many of the themes that they rehearse through pretence and role play from the environment around them and from their own experiences, and they use play to process some very big themes - fear of abandonment, love, terror, good, evil. They press many characters and personae into service in their work, and children's literature, movies and TV do the same.
Children up to a certain age are not worried about conundrums like seeing Santa at the grotto on Christmas Eve and then going home and seeing from the tracker that he has also managed to visit China in the course of the afternoon. Small children don't sweat the small details and that is perfectly fine and a good thing as far as their development goes on many fronts. All of children's literature aimed at children under age 9/10ish actually presents a great deal of utterly improbable characters and scenarios (and by comparison most early childhood formal readers are tragically unengaging as literature, and dull as ditch water). It doesn't matter. What matters is what is behind it all and how children can use it both as they play together and in their own heads.
We ourselves editorialise or make up stuff all the time when it comes to helping children deal with experiences they are exposed to, sometimes to encourage them to co-operate, sometimes to make them feel better about a hurt or a slight, sometimes to help them reframe something scary. I suspect even the most ardent Santa Claus sceptics would realise that just telling a child that monsters under the bed are non-existant and therefore nothing to be afraid of isn't going to cut it when reassurance is needed. You have to draw on resources other than an appeal to rationalism when dealing with children in their hour of need, and even when helping them through daily life.
In the case of the Santa Claus narrative, the propensity for magical thinking is harnessed to foster a belief in the benevolence of the universe, some force of goodness that smiles on each individual child. This is what is really going on when presents appear as if by magic on Christmas morning.
I personally did not link the appearance of presents to behaviour, or expect my children to feel there was some quid pro quo involved, or to feel beholden to me for the presents. Everything under the tree was and is from 'Santa Claus'.
I am not a fan of Ayn Rand in general, but I do feel that the idea of a benevolent universe is an important one to convey.