Ralphie's age is never officially stated in the film, but he seems to be in elementary school based on context clues, which explains why he has such a vivid imagination. The film does a fantastic job of translating the imaginary scenarios in his head into moments that we can relate to.
For example, when Ralphie is afraid he's failing his class, he imagines his mother and his teacher — dressed as a jester and a witch, respectively — making fun of him. But when he imagines getting the Red Ryder BB gun for Christmas, he sees himself as a cowboy from the Old West, saving his family from a band of burglars. He sees what he wants, even if it's far from reality, but that's exactly what makes him so relatable to kids watching the film for the first time.
