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confabulate (v.)

"talk familiarly together, chat," 1610s, from confabulatus, past participle of Latin confabulari "to converse together," from assimilated form of com "with, together" (see con-) + fabulari "to talk, chat," from fabula "a tale" (from PIE root *bha- (2) "to speak, tell, say"). Psychiatric sense is from 1924. Earlier verb was confable (c. 1500), from Old French confabuler. Related: Confabulated; confabulating; confabulator; confabulatory.

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Definitions of confabulate from WordNet

confabulate (v.)
unconsciously replace fact with fantasy in one's memory;
confabulate (v.)
talk socially without exchanging too much information;
Synonyms: chew the fat / shoot the breeze / chat / confab / chitchat / chit-chat / chatter / chaffer / natter / gossip / jaw / claver / visit
confabulate (v.)
have a conference in order to talk something over;
Synonyms: confer / confab / consult
From wordnet.princeton.edu