This study attempts to understand the relationship between use of context and semantic knowledge in the genetic disorder, Williams syndrome (WS). Earlier work had arrived at discrepant results, suggesting either near normal semantic priming , or unusual lexical organization  and atypical sentence integration  in this clinical group. To address these discrepant findings, we used two methodologies with an auditory false memory paradigm, and measured behavioural and neurophysiological (ERP) responses from three groups: children and adults with WS, Mental-Age matched normal children, and normal adults. While the behavioural data suggested that individuals with WS revealed a similar pattern of recognition as both groups of controls for words with semantic relatedness, their neurophysiological correlates suggested a different pattern. Our findings indicate that WS proficient compensatory behaviour camouflages a deviant neural pathway in the use of contextual cues. Our results also point to neurological changes during typical development, since typically developing children showed a distinctive pattern from our adult participants. Overall, our findings suggest that semantic organization develops slowly over typical development, and atypically in the Williams syndrome.