Yes, but the procedure does vary from religion to religion. For example, St. Christopher (the St. Christopher who carried Baby Jesus on his back, specifically) is no longer an "official" saint in the Roman Catholic Church. Essentially, it's believed that he is a myth, and while the story is still told to inspire small children, the Church generally does not hold that this particular St. Christopher is not an historic figure, so much as an "apocryphal tale".

Yes, it appears that a saint can be decannonized. The following excerpt from the Wikipedia article on Saint Simon describes one such case: In 1965, in the wake of the Second Vatican Council, the Church began to reinvestigate the story of Saint Simon and opened the trial records anew. Finally declaring the episode a fraud, the cult of Saint Simon was disbanded by Pope Paul VI and the shrine erected to him was dismantled. He was removed from the calendar, and his future veneration was forbidden. See http://en.wikipedia.org/wiki/Simon_of_Trent for more on Saint Simon of Trent. As for Saint Christopher, it appears he was not decannonized per se, and may still be venerated as a saint. An exceprt from The Catholic Herald explains: The confusion over whether St. Christopher is still a saint arose when Pope Paul VI revised the Liturgical Calendar, which includes the feast days of saints that are commemorated at Mass. Due to the proliferation of the number of feast days over the centuries, the Second Vatican Council in its "Constitution on the Sacred Liturgy" proposed, "Lest the feasts of the saints should take precedence over the feasts which commemorate the very mysteries of salvation, many of them should be left to be celebrated by a particular Church, or nation, or family of religious. See http://www.catholicherald.com/saunders/00ws/ws000406.htm.

I doubt it - they have an extreme investigation and appointing "the devils disciple looks into everything"