Subaru tire circumferance

I own an 02 subaru forester. my dealer told me the front tires have an inch difference on their circumference and this can ruin the differential and that i should get four new tires immediately, or get the larger tires buffed to the smaller tires size. I have plenty of tread on all four. My question is, how imperative is it that i fix this problem

They should be about the same circumference.
Is there a particular reason you took the car into the dealer and for them to measure tire circumference?

i took it in for an oil change. two of the tires were bought a year ago, the other two are about four years old, the dealer noticed that and measured them. all four are 205,s.

The dealer is right. That AWD can be seriously damaged by running with even a small difference in circumference. It is possible to shave a larger tyre down to match the smaller ones.

Replace all four ASAP.

Hopefully you have a manual transmission which is more tolerant than the automatic due to differing AWD.

dealers recomend keeping 1/4" or less in circumference, however, variations of even up to a 1/2" is quite normal from tires bought from the same manufacturer ,at the same time. Unequal tire pressures can easily cause a 1/4" difference in circumference. Shaving or buffing a tire costs upward on 35 to 40 dollars, so it hardly seems worthwhile to make a new tire smaller to fit. I do not know repair stats on subaru differentials due to unequal circumferences, but it should be very high for not many people would follow these though guidelines