Mill worker is the one making up stories (8)
I believe the answer is:
pressman
'the one making up stories' is the definition.
I can't judge whether this definition defines the answer.
'mill worker' is the wordplay.
'mill' becomes 'press' (I am not sure about this - if you are sure you should believe this answer much more).
'worker' becomes 'man' (man is a kind of worker).
'press'+'man'='PRESSMAN'
'is' is the link.
Can you help me to learn more?
(Other definitions for pressman that I've seen before include "correspondent?" , "Male journalist" .)