Literally means the exact opposite of figuratively - it's used when you want to emphasize that something is happening or true in a very direct and precise way.
When we use literally, we usually do so to prevent people from misunderstanding us. Imagine you tell your friend "I'm going to die laughing if I see this movie!" but they think you're really dying from laughter - then you'd say "Literally, that's what I said" to make it clear you were just joking. We also use literally when we want to show that something is 100% true or happening exactly as described.
How common is "literally"?
Word literally is considered uncommon in modern English. It has a balanced usage among all categories: speech, fiction, newspapers and academic texts.
Definitions
adverb
Word for word; not figuratively; not as an idiom or metaphor
Example: When I saw on the news that there would be no school tomorrow because of the snowstorm, I literally jumped for joy, and hit my head on the ceiling fan.
(degree, contranym) Used non-literally as an intensifier for figurative statements: virtually, so to speak (often considered incorrect; see usage notes)
Example: He was so surprised, he literally jumped twenty feet in the air.
Used to intensify or dramatise non-figurative statements; tending towards a meaningless filler word in repeated use.
Example: I had no idea, so I was literally guessing.
Used as a generic downtoner: just, merely.
Example: You literally put it in the microwave for five minutes and it's done.