So ds is 3.5 and has lately turned into quite the little story teller. Most of the time I really don't mind and it's harmless stuff eg what did you do in nursery today - we went to space in a rocket ship, type of thing that I know is obviously not true but I'll play along because I figure it's good he has a vibrant imagination and he really enjoys role playing and imagination based play at the moment.
However he's also saying things that would get others in trouble, such as so and so kept hitting him in nursery, or one of the staff was mean to him and told him he wasn't allowed to be upset. He's also recently been telling lots of story about his dad who he doesn't see for safeguarding reasons (and hasn't since he was only 1).
I've been trying to explain to him that it's fine to make up stories as that can be really fun to do, but when he's telling a story he needs to let the other person know when it's a pretend story or when it's a real story. But he's really struggling to grasp it.
I'm also finding it hard to know how to appropriately respond to him telling stories about his dad because I'm not sure how much is just imagination and how much is him processing that his dad isn't in his life but he's seeing his friends with their dad's. So far I've been correcting any info re: his dad and trying to give safe context eg. Tonight it was "did you know my daddy can fly an aeroplane" and I responded with no darling daddy can't fly aeroplanes but he can drive a car. Just incase there are blanks about his dad he's trying to fill.
I absolutely dread him doing this in front of my in laws and it getting back to his dad and being used against me.
How would others respond/ handle this and how do I teach him the difference between a made up story and a lie?