After the death of China's first emperor: Qin Shi Huang Di (or more famously known as Emperor Qin). His son Qin the 2nd inherited the throne and became Emperor Qin 2. 

Emperor Qin 2 was just a figurehead as Prime Minister Zhao Gao, a eunuch, was the real power behind the throne. Back in China, you had to be castrated to serve closely to the Emperor, as not to impregnate his concubines. Zhao Gao was an especially clever eunuch, and while he may not have any balls, he held a LOT of power in the political sphere.

Prime Minister Zhao Gao wanted the Emperor's spot for his own, so he devised a plan to test out the loyalties of the other officials in the imperial court. He presented Emperor Qin 2 with a deer and said to him, "VOILA your highness, this is a horse!"

The young Emperor Qin 2 was shocked and said, "But Prime Minister, this is clearly a deer."

Prime Minister Zhao Gao stubbornly retorted, "Your highness, this is a horse! If you don't believe me, ask the other officials in the court."

Several of the court officials followed in Zhao Gao's lead because they feared his power and wrath. They went along in deceiving the young Emperor bleating: "Yes! It's a horse, a fine horse!"

Others took the honest route and defied Prime Minister Zhao Gao, and they were brought to their deaths. The officials who lied for Zhao Gao survived the test and even ended up with a pleasant promotion...moving up in ranks.

Moral of the Idiom: Someone who points at a deer, but insists on saying it's a horse is deliberately lying. It's also used to refer to someone who distorts the truth/reality. 

ORIGINAL IDIOM: 指鹿为马

秦始皇死后，宦官赵高把秦始皇的小儿子胡亥扶上王位，成为秦二世。赵高当了丞相，还想篡夺帝位。秦二世昏庸无道，对赵高言听计从。赵高一时权倾朝野。为了试探朝廷的大臣们，赵高想出一计。

有一天，上朝时，赵高把一头鹿献给秦二世。他指着鹿说：“这是臣献给陛下的一匹马！

秦二世很诧异： “丞相，这是一头鹿啊！“

赵高固执的说：“不，这是一匹马！不信你可以问问众位大臣。”

许多大臣畏惧赵高的权势，随声附和说：“对！对！是马，是匹好马！”

只有几个正直的大臣说是一头鹿。事后，赵高把那几个说是鹿的大臣都杀害了，而那些附和他的大臣，一个个被提拔重用。