It's kind of hard to imagine a child lying who barely understands language and is even less able to produce something understandable. And babies certainly don't have a very developed theory of mind! But like all areas of developmental psychology the trend is for people to be able to do things earlier and earlier and deception seems to be one of those universal abilities all humans have very early on. A Psychologist, Vasudevi Reddy, from the University of Portsmouth has identified seven different categories of ways that babies can deceive. The ways that babies deceive are essentially (according to the Telegraph - I only could find 5?) fake crying, pretend laughing, concealing forbidden activies, distract parents attention and bluffing when threatened with punishment.

Here's an excerpt from the Globe and Mail story with some examples of actual children's behavior:

There was the 11-month-old who, caught in the act of reaching for the forbidden soil of a house plant, quickly turned his outstretched hand into a wave, his mother reported to Dr. Reddy, "as though he was saying, 'Oh, I wasn't really going to touch the soil, Mom, I was waving at you.' "

Babies also seem to think they are masters of the Jedi mind trick, using steady eye contact as a distraction technique. Another 11-month-old, upon being presented with toast she didn't want to eat, would hold eye contact with her mother while discreetly chucking the toast onto the floor.

"She's very sneaky," the mother told Dr. Reddy, "she thinks you can't see it."

Fake crying is another trick babies learn early on to get attention, Dr. Reddy says. The researcher defines "fake" crying as being more calculated than the usual "I'm tired/hungry/wet/hurt/lonely" cries.

"In one case the mother thought it sounded 'put on,' but watched from a crack in the door, and noticed that there were pauses in the crying which seemed rather like waiting to see if it worked," Dr. Reddy wrote in an e-mail.