To describe something as literal is to say that it is exactly what it seems to be. For example, if you put up a literal barrier to keep the world out, you've actually built a real wall.
The background of literal includes the Latin litterālis, meaning "of letters or writing." This led to the sense of exactness, suggesting something is "to the letter." Many people misuse this word, as in "Listening to that dull teacher put me in a literal coma." Possible, but highly doubtful.