There are some adults that still don't understand that concept...:-)
I am not sure what YOUR belief system is, but with my kids I tell them that God and the Angels know. Why? Its really hard to get them to admit to something YOU KNOW they did, but have no real proof. I tell the kids that it makes Mommy, Daddy, and the Angels sad when they say something that is not true. And the bible says to only say whats true.
You can also describe it as Truth is something that really happened and HOW it happened. A lie is something that isn't real and did NOT really happen. Something that you might WISH had happened, but it really didn't.
If you catch her lying about something you need to have consequences for it... whether its a time out, taking away a toy etc...
But having a 2 yr old understand any of these will be a miracle. Honesty is a pretty abstract concept and they are usually a bit older before they start to grasp it.
As she grows stress the fact that if you tell the truth the first time then you only get in trouble a little... But if you lie about it the trouble GROWS with each lie. Then follow thru with it.
As a 2 yr old when you know she's fibbing call her on it. Look at her with that look moms and dads do and tell her disapprovingly that you know thats not right. You KNOW she did it. And then follow thru with an age appropriate punishment. Start to distinguish between right and real and wrong and lying early.
It takes time. We have always STRESSED honesty with our kids... And my hubby and I do not lie (gotta set the example)... But last year we had to really get the idea thru to my then 7 yr old who was telling her teacher things like she "fell out of a moving van and landed on her back", " she has a 12 yr old step brother who lives in Canada and we have to pick him up every weekend", " we hit a deer and had to drive to PA to get the van fixed...". She denied and denied it over and over...
It took 2 weeks of having to go to bed right after dinner, no fun time with the family, having to write sentences daily,and writing an apology to her teacher. But we took the come down hard on this one and let her know it only gets worse from here if the lying continues... Its a non issue now. :-)