In an article on "telling truth and lies", while mentioning about a news report about a new research on how a liar takes more time than normal in telling a lie, the author said: " Lying comes naturally to humans, and anyone who tells you different is a damn liar. We give urselves away by pausing a split second before improving on the truth. The brain has to click into gear bfore delivering a carefully concocted lie. But this discovery has got me completely paranoid. What if I can't tell the truth fast enough? If I pause to draw breath or laugh at a dog with a puffy tail across the road, will my mates accuse me of having pants on fire." What does the phrase 'pants on fire" mean in the above paragraph.
There's a silly phrase we say when we're kids: Liar, liar, pants on fire!
This writer is just using "pants on fire" to mean the same thing as "liar."
It's not a common expression -- in fact, I've never seen it used before except with "Liar, liar."