Geographical confusion

Wren is very muddled about geography. While reading bedtime books Wren said: "I love this big book. Lets take it to America."
"We live in America, right here" I said.
"No," said Wren. "This is Mummy's house. This is round the block!"
"Its in America," I insisted.
"No," said Wren.
"Well, where does granny live?" I asked.
"Granny lives in Australia." He replied
"Ah!" I said, "you know it!
"Yes...Its in America!" added Wren.

Um.

Walking around the block Wren was avidly watching the tall trees for .... koala. "There koala in that one?" he asked, peering up a tall cedar. "No," I explained. "There are NO koala in all of America." "At Granny's house?" he checked. "Yes," I agreed. "In America" he concluded. "Nope." I said. "Far far away."

He is sure Granny is a short distance away and will reappear at any moment. He is less concerned about Roy although he was taken by the idea that Roy (Mum's dog) was "sad" and "want to find Wren."