I think a "white lie" is basically a small not-quite-truth that you tell someone either to be polite/tactful or to avoid an awkward situation. When that "untruth" becomes detrimental to the situation or has the potential of hurting those involved, then it becomes a full blown lie.

For example: A friend has recently bought an outfit and asks your opinion. You know that she is proud of her purchase and is eager to show it off. If the outfit looks okay on her but is just not your style, or if it's not something you would normally see her wearing, you would politely tell her a "white lie" and say that you think the outfit is great. If, however, the outfit is highly unflattering and would be an embarrassment for your friend to wear out, saying that the outfit is great would only cause harm to your friend. This would be a full blown lie and could lead to disaster and distrust in your friendship.

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