My guess is that a child does not really start to grasp the concept of reality until about the age of 60, and does not fully understand it until that moment just before death at whatever age. Reality, like everything else, is subjective. "Rationally" we can dismiss the existence of Santa Claus, the Easter Bunny, or omnipotent gods, but "realistically" we have no way to prove their nonexistence. Reality is totally dependent on our experiences, our observations, and our perceptions. Reality for someone growing up in the slums and someone growing up in the suburbs is totally different. Even the Laws of Physics are "determinations" we have made, with no idea whether they are universal or not. For atheists there is only one reality: we are born, we die, and anything we do in between, in the grand scheme of things, is totality inconsequential. That is why most atheists try to make life while we're living as interesting and enjoyable as possible: once we're gone, we're gone.
On a side note, I quite often wish I did still believe in Santa, unicorns, dragons, or Catholic angels and demons; I think such beliefs might stimulate more creativity in my artwork. Art is not reality, or for that matter, even rational, it is but a dream within a dream.

I think it depends on the child. My first child was very smart and developed mentally early. As young as 6 she was testing us on things like Santa and the Easter Bunny. Buy 7 I think she knew it was not real. As early as 2 her favorite questions were, what is that? and why? to everything, she wanted to know everything about everything in her world. A child's reality is going to be much different than an adult's, their would is small and simple, it will not look anything like we think of as reality,

I think, given the existence of religion and Trump supporters, that "reality" for many adults is not what we all might agree on. I think a more precise question might be when does a child abandon "magical thinking". I think that depends upon the child, their family, community, polis and culture, etc. I imagine kids that grow up surrounded by superstition, where it is normal and even considered wise, would never abandon it. I think that in cultures that have accepted science, or at least an evidentiary approach to explanation/ prediction, this approach may start to be instilled into the child at whatever age cause and effect become rationally apparent. Perhaps, in such cultures it may occur around the same age that a child begins to form their own identity, since doing so inherently involves an introspective exploration of personal history.

I think they grasp the concept as soon as they begin to interact with reality. They may not like it, but they learn that they are separate from the rest of the world and that they don't control it at a very early age - a few months at most. What they believe with regard to fiction depends on what they are taught.

I think they grasp what reality is implicitly at a very young age, when they see that they can control many aspects of their external world. They realize that when they push a ball it rolls and when they try to push a wall it doesn't move. Exactly when they understand the concept of reality depends on their parents and other influences, but certainly not before they start talking and forming other concepts.

Do we ever? look what site we are on, most believe in some kind of god, how is that grasping reality?

Many people will argue "what is reality". Very likely to be difficult and pretentious but I know what you mean. I wondered that as well. That is an extremely difficult question seeing how scientists still don't understand what consciousness is or how to test it. All we have is our subjective perception and theories.

From my reading, humans show signs of consciousness around 5 months and they begin to show more around 8 to 11. Ive also read the human mind doesnt stop developing until around 25 (depending on upbringing issues like abuse, early drug and alcohol use etc). Frontal lobe a little later (hence the mistakes even full adults still make under 30).

My best friend and I had this discussion recently. Realizing that now as adults over 30 thinking back to our teens and early 20's we weren't as conscious as we thought we were.

I think, like many things it depends on the person and their experiences. I had a lot of really extreme experiences in my childhood and grew up around adults. So I was much more different and much more aware as a teen than others I went to school with.

The other week I was playing with catch with my nephew who is 10 and his friends next door. She is 11. She is A LOT more conscious and aware than my nephew. Shes experienced a lot more than my nephew and is highly intelligent. From my experience it also tends to happen earlier with more intelligent humans.

I know I was more advanced than other children my age and reading at college levels in elementary. My nephew's friend I spoke of is in all advanced classes and has been for a few years. Her awareness and understanding truly shocked me.

Not sure we will ever have an answer seeing how complex this thing we call consciousness is.

Jacques Lacan has written extensively on this one of his theories I find fascinating is that infant children when first confronted with a mirror imprint upon their own minds the idea that the reflection is an idealized version of themselves to which they must aspire in vain.

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