Thanks, everyone. Your replies have given me food for thought. I want to tread lightly here!

I think the key to approaching this topic with your daughter is to be honest and vague. We are a God centered home, so my discussion would be much different than yours but I think no matter what your beliefs, it is important to be factual. I don't think it would harm anything to bring it up to your nieces parents, but in the end, they can send whatever message they want to. Blessings to you!

This could just be a fantasy from the 8 year old. And she may never mention being adopted at school; my kids haven’t. Do you need to discuss it with your daughter? Has she asked? If so, I would answer just her questions factually. Otherwise I see no real need to discuss it at this point.

When I was a kid I liked telling people that my mother's belly button loosened inside like a drawstring and I unfastened it and walked out when I was ready to be born. I was not into the whole penis-vagina-uterus fairy tale crap.

Don't assume that this child doesn't know the actual facts of her adoption. Kids sometimes come up with screen stories that are comforting to them.

Are you sure that is not just what the neice is saying knowing it isn't the cold, hard truth? I can see an 8-year old wanting to share that story more than "my dad is in prison and my mom had me high on Oxycontin"

My 5yo is adopted and knows. She knows that God played a part in matching her to us ( I honestly believe that) but she also knows that she has a birth Mom and knows the birth Moms first name and knows she couldnt take care of a baby so she prayed for some awesome parents for her baby and God heard her prayers and sent her to us. ( We did use an agency and have not met BM but DD doesnt know all this yet)
I am not sure if it is an age thing or just our kid, but she really doesnt seem interested in knowing more right now. We tend to go into it more around the date of when she came to us, but periodically we read books at bedtime about adoption and families that are different.

I dont think I would let an 8 yo believe she literally fell from the sky, that is just setting her up to be teased.

Its a bad idea as most kids who are adopted or know kids adopted understand the process. My child is 8 and will clearly tell you the process. Maybe the parents did find her outside so its a true story. We joke we got our kid off the internet, which is technically true as that is how we matched.

I think that's kind of a sweet story.

She will learn the true (but no less sweet) story of her adoption when her parents feel she is ready.

I can't really advise on how to approach with your daughter as God is very real in our house. Maybe try to deflect until her cousin knows the rest of the story?

I would tell my child that some parents are very uncomfortable discussing where babies and children come from with their children and sometimes make up simplistic stories to avoid teaching them. The best practice is to just nod her head when her cousin tells her such stories and change the subject to discuss something else. Her aunt will eventually get around to telling her about babies and where they come from and where her cousin came from.

I would relate to the parents, mention that there are MEDICAL reasons to know one is adopted, and let them deal with it.

The story itself is cute and at 8, still appropriate. I wouldn't have done this myself, but it's still sweet.

If your same aged daughter giggled, kids at school will do more than that. They need to give an age appropriate FACTUAL history to her now that she is old enough to hear it (not that the story they told makes any sense to me, but if it worked for them when she was tiny it's not doing anyone any favors now)

That is pretty messed up. I would talk to your SIL so they can clarify.

Poor kid.

Mention this whole encounter (including how your daughter giggled) to your SIL.

DH’s niece is visiting and told me and my DD today that “God dropped me from the sky” and her parents found her in a bush. Then she said not IN the bush but right next to it. She’s 8, as is my DD. I was pretty surprised, especially since they aren’t religious, but I just looked interested and said it was lucky her parents found her. My DD started laughing, which I feared would hurt her cousin’s feelings so I redirected the conversation. My sister-in-law previously told me that they’d let her know she was adopted, but I didn’t realize this was the story they told her. They’re from a culture that still has more old-fashioned views about adoption.

How do I discuss this with my daughter so that she’s more sensitive but not privy to more information than our niece herself? We are atheist, and our daughter knows this, so any talk of God is not readily accepted. Guess I’m looking for advice or others’ experience. Thanks.