In this episode, Frederick tells a story about when Caroline was six years old. As you recall, though, Frederick is Caroline's stepfather, and he didn't even marry her mother until Caroline was older--at least 8 or 9 years old. When you watch Caroline's flashback sequence in Season 8's "A Christmas They Never Forgot," you get a glimpse of what she looked like at that time, when her mother remarried, and she certainly wasn't anywhere near six years old.
Reply: This is true, but remember also that in "A Christmas They Never Forgot," it was revealed that Frederick was close friends with Caroline's biological father. Perhaps, then, Frederick knew Caroline when she was younger.