Laurie invented Charles because he is immature and unable to handle the socialization of kindergarten.
Young children often want to tell their parents things, but are not sure how to tell them. So they invent things. Charles was Laurie’s way of telling his parents what he did in kindergarten without actually telling them. Every day, Laurie could come home and tell his parents what he did without actually facing consequences.
We know that Laurie was an immature child, not actually very good at inhibition. He also really liked to shock his parents. A good example of this is when he told his father the story of the bad word “Charles” made the little girl say.
“What word?” his father asked unwisely, and Laurie said, “I’ll have to whisper it to you, it’s so bad.” He got down off his chair and went around to his father. His father bent his head down and Laurie whispered joyfully. His father’s eyes widened.
Laurie seems to enjoy shocking his father. He gets to get the girl in trouble, get in trouble in school, and say a bad word to his father, all without consequences.
Charles is really a cry for help. Laurie is floundering in kindergarten. He is unable to socialize to meet the rules and regulations that the school expects of him and behave the way a civilized person should. School is basically all about socialization, especially kindergarten. Laurie is failing. His parents have never taught him manners.
At lunch he spoke insolently to his father, spilled his baby sister’s milk, and remarked that his teacher said we were not to take the name of the Lord in vain.
Yet as kindergarten goes on, Laurie seems to get a little better. His teacher comments that he “had a little trouble adjusting” but is doing better with “occasional lapses.” His mother, of course, is clueless. She still has no idea that Laurie is Charles. Talking about "Charles" helps Laurie cope, and is one of the reasons he is getting better.
Invention is normal for a child, and invention is a coping strategy. When children invent stories, sometimes the reason why can be a window into what is really going on in their lives. In this case, Charles is Laurie's alter ego, and an expression of his true self. Inventing him makes it easier for him to adjust to kindergarten, and helps him share what he is going through with his parents.