The lies that Dill tells are a way for him to cover up the reality of a not-so-great home life. He states that he has an absentee father, which was probably very sad for him. So, to make up for the lack of a father, he fills in that gap in his life with imaginative, more exciting possibilities. One lie he tells about his father is that "he was president of the L&N Railroad", which is definitely an exciting position for a father to hold, if you are a little boy. Later he claims that his father "was a lawyer like Atticus, only much younger." This indicates that he longs for a father like Atticus; after spending so much time with the Finch family, he longs for a similar happiness. But, he did put the convenient caviat that he was younger-a way to beat out Jem and Scout in the "my dad's cooler" contest. When Dill runs away he claims that he had "been bound in chains and left to die in the basement...by his new father, who disliked him" but tells the more boring truth afterwards after Jem gets it out of him. Perhaps Dill's mother is involved with a guy, and Dill doesn't like him, so he came up with that story, which is a highly entertaining one.
Dill's lying can be contributed to his love of adventure, thrill, novelty, and most importantly in some cases, to his longing for a more stable or loving home life.
I think the reason that Dill lies is because he desperately wants to be accepted, particularly by children his own age. He is a very small child, prompting Jem to state that he is “right puny” for his age. I imagine that Dill has spent a great deal of his young life talking “big,” so to speak, to make up for his size. I think that Dill also feels inadequate because he is, for whatever reason, a fatherless child. In fact, fibbing about his father is where a number of his more elaborate lies originate from. He is different from others, and I suppose he thinks that if he is going to stick out anyway, he should probably stick out on his own terms.
i think dilll lies alot simply to try and fit in with the others.