Does this also mean that the other inhabitants will only know of your choices when the witnesses of your deeds travel to other cities and villages and tell them the story? And that if you kill all the witnesses, nobody will ever know?
That would sound great to me.
It is probably difficult to let you as a player understand what goes on around you. You may not see the boy sitting in the bushes watching you. You may not see him run to the next village... but when you come there they accuse you of murder and you have no idea how they found out. That is frustrating for the player if he wonders if the game is cheating or if it was a bug or... You get the picture? The boy was there but you don't know.
It would have to be done like in a movie where the director switches cameras showing the boy to 'you as a spectator watching a movie' but on the other hand 'you as the character' doing something bad should not know that you were being watched. You did not see it. So you should not be able to interfere. (Unless it is a quest to stop the boy before he reaches the village.)
