A furphy is Australian slang for an erroneous or improbable story that is claimed to be factual. Furphies are supposedly heard from reputable sources, sometimes secondhand or thirdhand, and widely believed until discounted. The word is said to derive from water carts designed and made by a company established by John Furphy of J. Furphy & Sons of Shepparton, Victoria. The steel and cast iron tanks were first made in the 1880s and were used on farms and by stock agents. Many Furphy water carts were used to take water to Australian Army personnel during World War I in Australia, Europe and the Middle East.

Because these water carts were places where people gathered and talked, a "furphy" became the name for the sort of chatter that circulated by the Furphy tank (see the similar meaning and derivation of the term scuttlebutt). In his book Memories of a Signaller, Harold Hinckfuss wrote of the "furphies" or rumours of pending movements of troops, while awaiting transfer to the French lines from Egypt. His account claims that the association of "furphy" with the latrines is not due to the association with the Furphy water or sanitary cart, but because a "furphy" was a term for a fart: "Every day in the tent someone would come up with a 'furphy' that he had heard whilst down at the latrines. That is why the different stories were called furphies ('furphy' was the term used for a fart)."