The Psychology of Fantasy

I have an older brother (50 years of age) who makes up fantastic stories about past glory days. He seems to fantasize about things he wishes he had done/been, and finally reaches a point where he becomes bold enough to tell the fantasy a truth to other family members.

Two components: a) he never tells these stories to anyone other than immediate family, and then only in one on one settings. b) His fantasies are always things that ALMOST could have been. He doesn't ever seem to tell lies that can be easily disproven, like saying, "I was the winning pitcher at the 1974 Little League World Series, a recearchable fact, more like, When I was 16, I raced motocross races every weekend and never lost a race. The Parents didn't allow it so I had to sneak out and race under a different name.

MY QUESTION: Is this harmful? He doesn't seem to be doing anything more than embarassing the person he is telling the story to; is it harmful to him though? What condition is this?

BACKGROUND: We lost our father at a young age, and my brother seems to be "stuck" mentally at that age.