I always presumed the paper mentioned deaths of actual townies. My Sim was reading the paper and it said "Sasha Lol was hit by lightning..." In my town, I have two brothers who live separately whose last name is Lol. One is now an elder and still unmarried, the other is an adult and married to Agnes. I don't usually change active families, but due to lack of nooboos, decided to make my married Lol's try for baby, which was successful (heard the chimes). So after that I switched back to my main town. So then when I saw Sasha died, I presumed my single sim had married (as I have a townie called Sasha), but turns out it wasn't her. I'm sure I saw Agnes with a toddler, but now the toddler is missing from the family, so I presumed their daughter died. So I thought "oh well". So several days later, my sim reads the paper and it says Kelly Lol drowned!
So my question is, is the paper supposed to notify you of real townie deaths, or does it sometimes just generate random names, who are supposed to be distant cousins of townies or something? Theres definitely no townies named Kelly.