Confabulation

Everyone does this all the time. Your memories are stories. So are mine. So are everybody's. You just make it up, for the most part.

Radical Mutual-Improvement » Blog Archive » Confabulation (Definition #3):

"Confabulation is what happens when your imagination works with your memory to generate a story, in particular it is the confusion of imagined details with true events. The interesting thing about confabulation is that you cannot avoid it. Imagination and memory are two heads of the same coin. Every time you access a memory, your brain will load it up into the imagination, fill in any missing details, and re-write it back into memory. As a result, stories will change and crystalize over time. "