How old are children when they can knowingly lie? [View All]

I ask this because several weeks back, my then 21 month old daughter and I were home alone waiting for my wife to get home from work. I was seated at the PC and my daughter had a cup of water and was sitting a bit behind me.

Well, after a few seconds of her drinking the water, I turned around and checked my email or whatever. I heard the water splashing and knowing that she had her hand in the cup playing with the water, I asked, "Grace, what are you doing?" and then I turned around.

As I was turning, she said, "drinking" and started picking the cup up to her mouth. I smiled a bit and then turned back around.

No sooner had I turned around when I hear the splashing again, so I said, "Grace, what are you doing?" and started to turn around again.

Again, she said "drinking" and started picking the glass up to her mouth. So, now I'm trying not to laugh and turned back around and she did the same thing again... and when i again asked her what she was doing, she picked the cup up to her mouth and said "drinking."

Now, does she know she is lying or is she just being a little naughty?