For example, what kind of story would Geralt the Witcher tell his kids? "Once upon a time there was some normal everyday shit that went how it always goes"?

Must be the equivalent of realworld kids saying "Daddy tell me the story about the Tesco delivery again! The one where they forgot the 2L bottle of Pepsi Max!"

"Once upon a time in a land where people build metal horses and birds to get around and tame lighting via tiny crystals inscribed with runes, a little boy met a friend that lived in a magical box with moving pictures..."

What we see as normal and mundane would be batshit insane for them.

I'm sure something could be done with characters like The Chief Cheeto, The Mad Muskrat, & The FBI FIBber, among many others.

Geralt could probably just tell one of his actual stories.

You don't have to "come up" with anything when reality isn't boring as hell.

Bedtime stories just being history lessons would be super efficient, though.

Well-told stories are about the characters in them. The setting need not be exotic for the story to be compelling.

Imagine them explaining the concept of the NYC new years eve ball drop.

Millions of humans flock together for a special night, once every 365 days. They await this night in the freezing cold for weeks beforehand. Just so they have the best viewing angle for a ball to drop downward for 59 seconds. All to force people to buy new calanders. They then celebrate by shooting explosives into the air above the crowd, as the crowd begins to sexually tease each other in 10 degree weather after standing in their own urine for days by this point.

Come to bed Bobby! It's time to hear your bedtime story! Tonights bedtime story is all about the horrific things the imperial japanese army did to allied soldiers during world war 2. Spoiler alert, we rock their world! Twice!

Why? A different fantasy story would be just as fantastical; Geralt could just tell The Hobbit.

What's the difference between our world where magic is real and fictional world where magic is real

Tom Sawyer will have to do.

An easy one would be telling them a story of a world without any magic, where even the most basic spells don't work. That'll be very scary and otherworldly for those kids.

So we had this unicorn...

I mean this is an actual plot point in Harry Potter, with the tales of Beedle the Bard…

you can tell kids anything.

This reminded me, ten or so years ago there was a post on reddit about how a guy got banned from a hotel. The short version being about a guy going to Canada to meet up with some buddies. He brought a suitcase with a bunch of pepperonis and such from his home state to give to said buddies. When he got to the hotel, there was no fridge, being winter, he laid out the ronies near an open window to keep em cool, and went to lunch. When he got back to his room it was infiltrated by seagulls, and chaos insued. They trashed the hotel room, guy got banned, he was attemtping to write the company many years later to get unbanned.

It was so funny, and I was so bored with our books, I read it to my 3 or 4 year old kid. He loved it. What I didnt realize was I now had to tell it at bedtime at least weekly for the next two years. I had it memorized, and paraphrased it, "tell me the seagull story". Two years I had to tell that story. I bet my son still remembers it, I only told it to him at bed time at least 100 times

we have them already. rambo, reacher, sherlock holmes. and the younger ones would still fly. jack and the beanstalk and humpty dumpty and such.

In this world you have to respect everyone's gender, and you don't shit in your robe.

Gasp

Those things are mundane in that context.

Case in point, if you spent time with people who live in Sub-Saharan Africa and have elephants raid their crops, lions kill their kids, or hippos and crocs make every waterway dangerous, all those stuffed animals and children's books about the zoo that Western children have are full of genuine monsters. Real life, dangerous killers. And your baby from Iowa says "bi-bo-bopimous" and it's cute? Hippos murder people daily.

Also, you forget that plenty of people also genuinely believe in and practice magic, give things to house elves and fae, banish spirits, and take potions. That context doesn't make stories any more or less valid. Stories make stories valid. And any context or setting removed from your own, is exotic to you.

Maybe they would make up stories about travel underground, off planet, underwater, quite a bit like Jules Vernes did for us.

Assuming the magic is powerful but limited in scope, there would still be places beyond reach.

In the world where everything you do is being watched, the grand demon Zark Muckerburg tries to change everything you see in order to control your behavior and perception of reality itself.