Reality vs Fantasy

ScienceDaily has an article on a study that concluded that children can distinguish between reality and fantasy using contextual cues.
“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.”
And what does this have to do with children’s literature? Plenty!
My question is what is wrong with a child between the ages of 3 and 5 or even much older believing in fairies or other amazing creatures like elves, witches, dragons, etc. Why does this demonstrate their ability to distinguish reality from fantasy? Seems to me that there is a lot larger issue that if something is seen as scientific it is real and if it is creative it must be untrue.
Or perhaps I am just a trippy type of person who wants children to read books, internalize them and dream their big dreams. I want children to be children a lot longer than they are in our society. Let’s give them their years to believe in fairies and the fantastical. Let’s allow them to be real for children.

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