Both Uses

literally
in
Hatchet, by Gary Paulsen
(Edited)

He stood away from the eggs for a moment, literally stood and turned away so that he could not see them.
p. 96.7

literally = actually (not just figuratively)
Then he turned and stood still, with the sun at his back, and studied the water again. It was, he saw after a moment, literally packed with life. Small fish swam everywhere...
p. 102.8 *

literally = actually (not figuratively; not an exaggeration)

Definitions:

(1) (literally as in: literally--not figuratively)
actually true using the basic meaning of the words (not an exaggeration, metaphor, or other type of figurative speech)
(2) (literally as in: literally at death's door)
an intensifier (to intensify what is said -- especially a metaphor)

Since literally can mean actually true, but can also be used to intensify a metaphor, the reader has to use context to know what the word means.

For example, if you read "She stabbed him in the back," you would probably assume she betrayed him. But if you read it in a murder mystery where the victim was stabbed, you might assume you were being told that she actually stabbed him.

Because confusion can arise from this kind of usage, many authorities discourage using literally to intensify a metaphor--especially in formal usage.
(3) (literal as in: a literal translation)
word for word
(4) (meaning too rare to warrant focus)
Less common and more specific meanings of literal include:
- an earlier or original meaning of a word -- as in "In Japanese the literal meaning of ronin was a 'samurai without a master,' but it is now used to describe a student who did not pass the entrance exam and is without a school."
- lacking imagination -- as in "She has a literal mind."
- a fixed or hard-coded value in a computer program -- as in "Find every instance of the literal in the source code."
- related to letters -- as in "In algebra we use literal notation as when 'x' represents a value."