C# variable scoping: 'x' cannot be declared in this scope because it would give a different meaning to 'x'

if(true)
{
    string var = "VAR";
}

string var = "New VAR!";

This will result in:

Error 1 A local variable named 'var' cannot be declared in this scope because it would give a different meaning to 'var', which is already used in a 'child' scope to denote something else.

Nothing earth shattering really, but isn't this just plain wrong? A fellow developer and I were wondering if the first declaration should be in a different scope, thus the second declaration cannot interfere with the first declaration.

Why is C# unable to differentiate between the two scopes? Should the first IF scope not be completely separate from the rest of the method?

I cannot call var from outside the if, so the error message is wrong, because the first var has no relevance in the second scope.