For those who understand the Bible literally, it means to attempt to understand the Bible how it had been intended to be understood. This requires the interpreter to be sensitive to the context and genre of the various books and even passages of the books of the Bible.
For instance, the literal interpreter understood Jesus' instructions to pluck out theirs, cut off their hands, or to buy a sword figuratively as hyperbole or exaggeration, and not in a wooden but a literal manner.
Literal interpreters had historically attempted to regain a sense of the intentions of the original writers. The great Reformer and Bible translator William Tyndale (1494–1536) had the same understanding of what it had meant to interpret in the "literal sense":
· "Thou shalt understand, therefore, that the scripture hath but one sense, which is but the literal sense. And that literal sense is the root and ground of all, and the anchor that never faileth, whereunto if thou cleave, thou canst never err or go out of the way. And if thou leave the literal sense, thou canst not but go out of the way. Nevertheless, the scripture uses proverbs, similitudes, riddles, or allegories, as all other speeches do; but that which the proverb, similitude, riddle or allegory signifieth, is ever the literal sense, which thou must seek out diligently." http://creation.mobi/william-lane-craig-vs-creation
This discussion is more than a mere quibbling about words and their definitions. How so? The Bible critics who want to construe the Bible in a progressive way seek to demean the literalists by redefining "literal" to refer to Bible traditionalists who are out-of-touch with the literature of the Bible, making them seem ignorant, narrow, and uneducated.
Why would the Bible progressives malign us in this manner? Simply this - to make their own progressive interpretations more palatable!