in the literal or strict sense: What does the word mean literally?
in a literal manner; word for word: to translate literally.
actually; without exaggeration or inaccuracy: The city was literally destroyed.
in effect; in substance; very nearly; virtually.

1525–35; literal + -ly

figuratively, literally, virtually (see usage note at the current entry).

Since the early 20th century, literally has been widely used as an intensifier meaning “in effect, virtually,” a sense that contradicts the earlier meaning “actually, without exaggeration”: The senator was literally buried alive in the Iowa primaries. The parties were literally trading horses in an effort to reach a compromise. The use is often criticized; nevertheless, it appears in all but the most carefully edited writing. Although this use of literally irritates some, it probably neither distorts nor enhances the intended meaning of the sentences in which it occurs. The same might often be said of the use of literally in its earlier sense “actually”: The garrison was literally wiped out: no one survived. Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
literally (ˈlɪtərəlɪ)
1.  in a literal manner
2.  (intensifier): there were literally thousands of people
usage  The use of literally as an intensifier is common, esp in informal contexts. In some cases, it provides emphasis without adding to the meaning: the house was literally only five minutes walk away. Often, however, its use results in absurdity: the news was literally an eye-opener to me. It is therefore best avoided in formal contexts

Collins English Dictionary - Complete & Unabridged 10th Edition
2009 © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009
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Word Origin & History

1530s, "in a literal sense," from literal. Erroneously used in reference to metaphors, hyperbole, etc., even by writers like Dryden and Pope, to indicate "what follows must be taken in the strongest admissible sense" (1680s), which is opposite to the word's real meaning.
Online Etymology Dictionary, © 2010 Douglas Harper
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Example sentences
He had now figuratively as well as literally taken home his bride.
Sometimes they'll literally design it for you even though they may not know
  that's what they're doing.
With everybody buying music online, it's literally been reduced to the size of
  a postage stamp.
For them, the act of writing is literally moving language from one place to
  another, proclaiming that context is the new content.
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