I have a 9 yr old niece who constantly tells outrageous stories that she claims are true, but aren't.?

She's your niece it isn't your problem

I'd just ignore it. It's cute and harmless, and she'll grow out of it. Plus, it might be true. My brother in law was born a cat.

If it really bothers you then you can say something like, "You have such a great imagination, sometimes I don't know if your are being serious or telling stories! Could you let me know if you are going to tell me a story, by saying, 'I have a story for you...'" Though, if she tells lies like, no she didn't eat candy after being told not to but you know she did because her tongue is blue or whatever, then that may be that she is afraid of the consequence of doing something she was told not to do. I have major issues with my nephew doing this and it drives me nuts. I try to assure him that he's not in trouble but it's important that I know the truth so I know everyone is safe and by knowing the truth I know better how to help him solve the problem.

It depends on what she is saying, if it is only pretend things like being born a cat, that is harmless and she should grow out of it. If she is saying things that are disturbing then I would start to worry as there could be an underlying reason that she is trying to tell you, but doesn't know how. If the things she is saying are disturbing, try to get her to talk about it in more detail and then go from there.