Zhao Gao was contemplating treason but was afraid the other officials would not heed his commands, so he decided to test them first. He brought a deer and presented it to the Second Emperor but called it a horse. The Second Emperor laughed and said, “Is the chancellor perhaps mistaken, calling a deer a horse?” Then the emperor questioned those around him. Some remained silent, while some, hoping to ingratiate themselves with Zhao Gao, said it was a horse, and others said it was a deer. Zhao Gao secretly arranged for all those who said it was a deer to be brought before the law and had them executed instantly. Thereafter the officials were all terrified of Zhao Gao. Zhao Gao gained military power as a result of that.
Interestingly, it’s been proposed that the Japanese word “baka”, meaning fool, but written as horse-deer, comes from this too.
There’s a Chinese idiom “point at a deer and call it a horse”, with a familiar-sounding story behind it.
Quoth Wikipedia:
Interestingly, it’s been proposed that the Japanese word “baka”, meaning fool, but written as horse-deer, comes from this too.