"Lay" is a transitive verb...it needs an OBJECT
"Lie" is an intransitive verb..it nees no OBJECT.
Lay it down. ("It" is an object.)
Lie still. ("Still" is just an adverb describing the verb "lie.")(Of course, the subject of both of these is "you understood.")
"transitive" means that it carries the subject across to an object..."TRANS" (across)...The subject does something TO something. While, with "intransative" means the subject can do something without doing it TO something/someone else.
I hope that one was clear.