Little kids don't believe everything they hear

Research published in Child Development suggests that little kids are pretty good at figuring out whether something they're told is true or just a fantasy:

In three studies, about 400 children ages 3 to 6 heard about something new and had to say whether they thought it was real or not. Some children heard the information defined in scientific terms ("Doctors use surnits to make medicine"), while others heard it defined in fantastical terms ("Fairies use hercs to make fairy dust"). The researchers found that children's ability to use contextual cues to determine whether the information is true develops significantly between the ages of 3 and 5.

Moreover, when new information is presented to children in a way that relates the information in a meaningful way to a familiar entity, they are more likely to use the contextual cues to make a decision about whether the new information is true than if the new information is simply associated with the entity.

Link