In 'The Gruffalo' by Julia Donaldson, a clever mouse encounters various predators in the woods and fabricates a story about a mythical creature called the Gruffalo to escape being eaten. As the mouse describes the Gruffalo's terrifying features, the fox, owl, and snake all flee in fear, believing the mouse's lie. Eventually, the mouse meets the real Gruffalo but cleverly convinces him that he is the scariest creature in the woods, securing his own safety.