confabulate

(verb) unconsciously replace fact with fantasy in one's memory.

(verb) 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. Examples: "The men were sitting in the cafe and shooting the breeze."

(verb) have a conference in order to talk something over. Synonyms: confer, confab, consult. Examples: "We conferred about a plan of action."