In a world where child soldiers are all too real, and where a lethal gun held in a callow hand is all too common, fantasy has a way of getting blurred. Such blurring is precisely the point of I Declare War. There, armed with fake weapons yet a formidable imagination, a band of kids are playing war games in the woods under a hot sun. Inevitably, then, their summer escapade doubles as a wintry allegory, and thus is prone to the portentous symbolism and earnest meaning that often plague that overwrought genre. Not here. To their credit, Canadian co-directors Jason Lapeyre and Robert Wilson steer clear of the pitfalls. Instead, like the little soldiers tiptoeing through the brush, the film creeps up on us – the message may be loud, but its manner is quietly disturbing.

The obvious touchstones are Lord of the Flies and If, with a sprinkling of The Hunger Games added for some contemporary spice. The difference is that this story deliberately oscillates between fantasy and reality, between what is imagined and what is true. So, in their active minds, the children are not tossing water balloons but actual grenades, not wielding stick guns but actual assault rifles. Consequently, we're made to see the ongoing war through their imaginations – the explosions, the rat-a-tat-tats, the blood, all look as credible as they would in any action flick.

Neatly, then, an early message is delivered: The children's world of pretend is conditioned by the culture's. For example, a kid named P.K. (Gage Munroe), a general in one of the competing armies, is a devoted fan of the movie Patton, and so has mastered such bellicose clichés as, "If you want to win a war, you have to take casualties." When he puts the axiom into practice, sacrificing a member of his battalion to the greater good of victory, that early message takes on a deeper layer: The assumptions in our fictional culture tend to become self-fulfilling prophecies in fact. The wars that children only imagine become the wars that adults actually fight.

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But it gets worse. The circle turns vicious when those actual wars provide the fodder for more fantasies. In this case, an Asian boy, fleeing from his white-skinned pursuers, is seen wading through tall grass fanned by helicopter blades whirring overhead. The tableau echoes newsreel footage from Vietnam no less than scenes from Platoon or Apocalypse Now. Either way, the blurring continues.

At other moments, the script undercuts the allegory by treating the combatants as just 12-year-olds with 12-year-olds' concerns. Jess the girl soldier (Mackenzie Munro) has a crush on a pretty blond lad, and her fantasies run to love not war – she's Cupid with a crossbow. The acid-tongued Joker (Spencer Howes) teases a newcomer to the fray, a skinny, church-going boy from a religious family. "Ever been buggered?," Joker taunts, and the placid reply is unwittingly witty, "No, it's an Anglican church." Also, P.K. and the opposing general were once fast friends who have drifted apart – they're simply acting out a childish civil war. Yet here, once again, the parable clicks back in. Aren't civil wars often little more than the bloody acting out of childish disputes?

Not everything works that well. The narrative meanders on occasion, the conceit can seem repetitious, the editing is loose. Nevertheless, buoyed by the naturalism of its exclusively young cast, the picture effectively gets into your head and under your skin. Proud of its dates, history tells us when wars are declared, but this film reminds us that history is naive – they start much earlier, in unformed characters and impressionable minds.