During which developmental stage do children start to differentiate between reality and fantasy more clearly?

During early childhood, which typically spans ages 2 to 6, children undergo significant cognitive development that enhances their ability to differentiate between reality and fantasy. At this stage, children engage in imaginative play and often create elaborate narratives about their experiences. This imaginative thinking is a hallmark of their development; however, they may not yet fully grasp the distinction between imaginative scenarios and real-life events.

As they progress within this stage, children begin to recognize that their fantastical thoughts and the stories they create are not the same as actual events. Their experiences with the real world and feedback from caregivers help them refine this understanding. This developmental milestone lays the groundwork for more complex reasoning skills that develop in later stages, such as middle childhood and adolescence, where these distinctions become more pronounced and nuanced.