Knowledge and its attendant phenomena are central to human storytelling and to the human experience more generally, but we find very few games that revolve around these concerns. This works to preclude a whole class of narrative experiences in games, and it also damages character believability. In this paper, we present an AI framework that supports gameplay with non-player characters who observe and form knowledge about the world, propagate knowledge to other characters, misremember and forget knowledge, and lie. We outline this framework through the lens of a gameplay experience that is intended to showcase it, called Talk of the Town, which we are currently developing. From a review of earlier projects, we find that our system has a novel combination of features found only independently across other systems, and that it is among the first to support character memory fallibility.