This is when a complete story is perceived in a given situation, but it is not the actual narrative at work. Often it is based on limited knowledge, inaccurate information, or possibly a false assessment of the situation.
Some people have left the Church I lead and hate me. It is because they came to believe a false narrative about me. They were sure I was trying to hurt them when I chose that passage for a sermon. Maybe they thought I was out to get them when I moved that thing in the Church. Whatever story they made up in their head was not what was really happening.
Here is the harsh reality: You and I probably live with a false narrative of something or someone.
You created a story about someone who said that mean thing to you. I made a narrative in my head about the person who left the Church. We can detail all the ways that this couple was wrong for doing what they did.
The problem is that we have limited knowledge, inaccurate information, or a false assessment of the situation. That means that there is a great chance we are totally wrong.
One act of grace as a Christian is to fill in the gaps in our knowledge with grace. We are to believe the best in people even when we think they might be up to something hurtful. Just like people are wrong about you, there is an overwhelming chance that you are wrong about someone else.