What does ‘Chinese whispers’ mean?

“Chinese whispers” are rumours that have been circulated and watered down until they only vaguely resemble the truth.

The phrase originates from the game “Chinese Whispers” commonly played at children’s parties. A phrase is whispered around a circle and the last person to hear the phrase has to guess what the initial phrase was.

“Simon heard from John that you were fired.”

“What? No. I just had Friday off work.”

“Oh. It must have been Chinese Whispers.”