Lyric discussion by Kit-Kat 

I agree that this is about her sister's death. She was a child and that's why there's references to playgrounds. Being a child she didn't understand what had happened. when someone told her her sister wasn't coming back, her coping device was denial. When she finally realized the reality of this, it was a huge blow to her, that's why she says that she knows she's not sleeping. It's the whole "This isn't a nightmare. She won't come back." thing we go through when we're little and lose a pet, a friend or a family member. It's actually a really depressing song, but still a beautiful one.

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