My DGS, aged three, started talking late but is making up for it by never stopping. His latest thing is to do something he knows is naughty and then, with a completely honest face, blame the long-suffering dog.
DGD1 did the same and then went on to fib when she was around six. But she soon found it didn't pay. Her parents just stopped believing her. Totally. If she said she'd hung her coat up they'd go and check, making a point of saying that they couldn't trust her as she told porkies. No punishment but they simply treated everything she said as a lie. She learnt very quickly it didn't pay and is now the most honest child.
She has a vivid imagination and gets high marks for her story telling at school. DGS1 is also showing signs of a good imagination. I shouldn't worry too much, it's just part of growing and once she finds it doesn't pay she'll stop.