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late 14c., "taking words in their natural meaning" (originally in reference to Scripture and opposed to mystical or allegorical), from Old French literal and directly from Late Latin literalis/litteralis "of or belonging to letters or writing," from Latin litera/littera "letter, alphabetic sign; literature, books" (see letter (n.1)). Meaning "of or pertaining to alphabetic letters" is from late 15c. Sense of "verbally exact" is attested from 1590s, as is application to the primary sense of a word or passage. Literal-minded is attested from 1791.
A constant made available to a process, by inclusion in the executable text. Most modern systems do not allow texts to modify themselves during execution, so literals are indeed constant; their value is written at compile-time and is read-only at run time.
In contrast, values placed in variables or files and accessed by the process via a symbolic name, can be changed during execution. This may be an asset. For example, messages can be given in a choice of languages by placing the translation in a file.
Literals are used when such modification is not desired. The name of the file mentioned above (not its content), or a physical constant such as 3.14159, might be coded as a literal. Literals can be accessed quickly, a potential advantage of their use.