Imaginative Play?

It was a lazy Sunday afternoon (today). We woke up from our nap at 4 PM. Our home overlooks the park across the street. Megha loves looking at the park from our steps leading to the first floor. There was no one in the park. She asked me why there was no one in the park. I told her because its very cold outside, all the kids must be playing inside. Then she said, "No momma, I see one little kid playing". I looked again. There was no one. I asked her where the kid is. She said, near the slide. I looked again, no one. I asked her what the kid is wearing. "A black winter jacket". 

I thought, maybe she just mistook the shadows of the pole nearby. Then she said, "now she is on the swing momma. can we go too?" There was no one on the swing but the swing was moving. WTH? I thought and took her to the window to look out. 

She maintained that the kid was playing in the park. 

She doesnt know the concept of fear and i have never seen her lie intentionally before. I doubt she knows what a lie is. It really scared me. 

Is it possible kids imagine things and say it? 

I got really scared. Its not a fiction or something, it just happened this evening!
Weird.