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Absolutely. Also accusing or being suspicious that someone is stealing from you or storytelling, events that happened to the person that are totally untrue....these all can be part of the early stages of dementia.
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There is something called confabulation, in which a person can't remember certain details of a past event and makes them up in order to fill the gaps. My mother does this all the time. Oddly, the confabulated details often replace the actual details, and become permanent parts of her memory.

I don't know if this is necessarily associated with dementia or not.
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Mother "lies" every day. Some untruths are lies and some are just stories because she can't remember.
Bath time -- I took one yesterday (can't remember)
Wash hands (supper time) -- I just did (lie; doesn't like getting hands wet).
Name calling under her breath -- Oh no, I was talking about *whatever first catches her eye* -- (lie; her "cover ups" are obviously that)
Then there's talking on the phone when I call brother so she can talk to someone other than me -- mostly stories because she can't remember much day to day, but wants to carry on a conversation.
I've learned to tell the difference and that more and more is loss of memory.
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Some people of all ages like to tell tall tales to get much needed attention, doesn't mean a symptom of dementia. More likely it is pseudologia fantastica or narcissistic personality disorder . Usually this starts out at a young age and continues as they get older.

Now, if the person has just now started to make stories up, and are in their later senior years, then yes, it could be dementia. Anything can trigger it, such as a TV they saw, or something they saw on the news. I remember when my Mom developed late stage dementia due to a tall, she was saying things either about my own Dad or her father that just didn't ring true.
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Your profile says Mom is 96. Not unusual at this age for some decline. Is she lying or telling stories. Is it, she says she took her pills but really didn't. This is not so much lying as she just doesn't remember. Her lying could be where she is trying to cover up that she realizes her mind is not working right. I would have her see her doctor to rule out things. She could be dehydrated. Her potassium levels could be low. These should all be checked out before the word Dementia is brought in.
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There isn’t much detail here, but understand that when a person with dementia “tells a tale”, to them, it’s true. Hallucinations and delusions are a big part of the disease. When they claim someone is stealing from them, hiding in their closet, etc., in their broken brain, they believe what they’re saying is fact. They no longer have the mental capacity to make up stories and lie about something or someone. They’re no longer that clever.

If you care to provide moredetail about your question, maybe we can give better advice.
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