The Placement
Pinocchio may not have been honest, but he was certainly clever. He allowed the adults to tell his story so by the time they guided him and Emma away from the diner, he was a hero. They were also kind enough to fill in gaps of knowledge; they unknowingly taught him words like "car", "police" and "newspaper". This world may be one without magic, but they clearly knew how to compensate.
On the way to "social services" Pinocchio transformed his father into a brave war hero. After more than one adult asking about the man's whereabouts he had to come up with something, and couldn't bring himself to kill him even in a lie. So he said (almost truthfully) that his father was fighting a war and wouldn't be back soon.
Which brought him and Emma to social services. As Pinocchio understood it, this was where children were taken until an adult decided to want them. Such an idea was completely beyond him. Whatever the social workers said Pinocchio insisted he stay with Emma. They told him such a placement would be difficult but he insisted.
"I have to look out for her! Emma is my responsibility!"
They soothed him with promises that they would stay together. While he and Emma waited for someone to want them he was given things to keep him entertained. He was most fascinated by the books. All these words collecting into stories about far-off places filled with magic. They made home feel a little closer.
Pinocchio played with Emma as much as he could. He let her suck on his fingers and when she was sad he made funny faces. When it got dark he looked out to find the stars. There were hardly any at all. Everything was different here.
One day a social worker pulled him aside and told him that there might be people willing to take both him and Emma. "But I don't have your name to put on the form," she concluded. "I don't think anyone ever asked you."
Pinocchio was ready for this one. He had no choice with Emma's name; it was stitched into her blanket, impossible to ignore. As for himself, he knew better than to give out his real name: Rumeplstiltskin was cursed here along with everyone else.
"August," he replied. "My name is August." The lady wrote it down without question. After all, why would a little kid lie about their own name?
A man came for them soon afterward. He barely gave the children a glance before signing the papers. Pino- August watched him and knew this man didn't really want them. Why he was willingly taking them anyway was a mystery. Going with him took a lot of bravery.