All words are a lie. All narratives are built of symbols and cliches and agreed upon fictions in an attempt to point to reality. Reality is a thing we cannot touch or experience directly and is always filtered by our tools, experiences and perceptions. Even math might be merely a model, one where we convince ourselves integers actually exist (where does one thing become separate from another when reality seems to be built of atoms with probabilistic shells of elections and waves of electromagnetic interactions?)
As for being harmful? Well, fiction and non-fiction narratives are all powerful tools for shaping how we perceive of our reality. They can be harmful or helpful. Some of our favorite fictions are things like justice, freedom, liberty, or any conception that we all have rights.
Additionally, when we tell fictions we are crafted a world we can aspire to. We make gods and heroes to imagine what it would be like to be better. We make villains and demons to remind us of what we should avoid. Without these I do not believe we would be in a better place. One could even call these noble lies.
Of course, this does mean fiction can be dangerous and should be selected carefully. Ayn Rand has a peculiarly powerful hold over people because her fictions are good at making a deep impression on people. Vacation Bible Schools and overtly Christian education are aimed at controlling the narrative young minds receive. Then there's the constant mythologizing of history done to legitimize modern political stances (e.g. Civil War was some sort of lost cause about state's rights, Mayflower was the first "real" colony, founding "fathers" were near perfect, etc.).
Narratives are powerful. Worth noting Plato came to your same conclusion in his Republic. Essentially deeming all myth and plays and stories as too dangerous to be allowed.