Pseudologia fantastica is the scientific name of the disease 'pathological lying'. That is the state in which you tell lies as a habit or as a compulsion. While ordinary lies will be aimed at certain purposes like making profit, escaping punishments etc, pseudologia fantastica is characterized by lies without purposes.
It is a mental ailment usually reported in youth, typical onset age being 16. Most of the reported patients were found to have abnormalities in the central nervous system and this is not a kind of serious psychosis. A typical characteristic is that the lies told by the 'patient' may not be completely improbable, but may have some element of truth. If you force him, he may admit that it is a lie, although unwillingly. Also the tendency to make lies is long lasting, and most of the lies told will be in favour of the liar himself. E.g, telling a brave thing he had done, telling that some very famous person is his relative etc. This disease can also be present as a false memory syndrome, i.e., the sufferer actually believe that fictitious things have happened.