Penelope is a young girl in a small town, but everybody calls her "Lizzie Dripping," because she's always making up stories. (I guess "Lizzie Dripping" was British slang for a girl who tells lies.) And then one day, Penelope encounters a witch that only she can see.
That's the premise of Lizzie Dripping, a TV show that aired on British television from 1973-1975. The show was written by Helen Cresswell, who wrote a ton of British TV for kids and also wrote over 100 novels — including a handful of Lizzie Dripping books. What's amazing about this show is how much it captures the feeling of being a little kid, making up weird nonsense stories and rambling around — including a certain aimlessness. The pace is slow, and Lizzie's internal monologue is conveyed through actual voice-overs. But her whole encounter with the witch is just brilliant, and feels actually kind of like a strange fairytale.
A few episodes are on YouTube — the one above is called "Lizzie Dripping Tries a Spell." At the part I've cued up (about 09:40 in), Lizzie meets her witch friend and begins to suspect that she, too, might be a witch. She wants to learn to do a spell — but she has to pay a forfeit for having missed a meeting with the witch the day before. Lizzie's whole internal monologue afterwards, about what she would do if she became a real life witch, is just the best thing ever.