I know that it exists, as someone told me about it when I was a teen, but I have since forgotten it. I think that it was German, but I can't recall.
For a better definition, perhaps an example might work better: You have a three year old daughter, and your wife is pregnant. You tell your daughter two things: 1) Santa is real, and 2) The baby is in mommy's tummy. The first is an straight-out lie, while the second is only technically a lie. As your daughter has no real knowledge of biology, she only has known thus far that food ends up in your tummy, so she thinks that the baby is in there with the food. [Insert hilarious anecdote here.]
The important difference between the two examples is the intention and long-term results of each. For the first, even though you mean it as a way of increasing their happiness, eventually they will find out the truth, sometimes with devastating consequences. For the second, the technical lie was only used to cover areas that the child wasn't ready or able to understand, and, as she grows older and understands more, she will also understand why you simplified such a complicated concept and won't resent you for it.
Another example is one we use every day:
"How are you?"
"I'm fine." (Which, of course, means "I'm not feeling too good, I'm behind in my car payments, my job stinks, etc., etc., etc., but I don't want to get into it.")
So how about it, fellow linguaphiliacs? Does one of you know the word to which I am referring?
