The second way in which words don't have literal meaning is belayed by variance according to sociocultural context. We rarely spell out exactly what we mean (we're rarely "literal"). Instead, we expect others to be sensitive to the contexts in which we use words. When someone asks, "How are you," the response is nearly automatic—"Fine, how about you?" The question isn't literal, nor is the answer. The person asking generally has no interest in how you actually are, and neither would you tell them that things are going terribly (even if they were).
That's because the question is not a "literal" question. It's real function is social in nature. It's meaning is something like: "a polite recognition of your existence in a shared space where an interaction is about to take place." As is the reply. It performs as a sort of signal between the two of you that, hey, I'm a person who's a decent person, and this interaction is going to go just fine. It works to simplify something that could be complicated and messy (the interaction of two people) into something simple and smooth (an everyday interaction).
For another example, I think we're all aware of the difference in "the kind of language we use with our friends" and "the kind of language we use with our parents." Or how about "the kind of language we use with strangers at a formal event?" Part of being a well-socialized human is knowing what kind of language to use where. Word meanings shift according to social context—a word that's funny or natural with friends might be insulting or embarrassing to use with your parents and completely unacceptable in social company...
Words are not literal because they are things that carry messages. Messages, by their nature, carry information from one person (the speaker or author) to another (the listener, reader, or audience). These people are active participants in assigning meaning to words. In other words, "words" don't exist out there all by their lonesome. They exist in relationship to speaker and audience. They are dependent, not independent!
3. Words depend on linguistic contexts
First, let's note that "words" can vary in meaning depending on the words they are used with. Let's begin by asking ourselves a very basic question: Why are we worried about "words" at all? After all, a "word” is an ambiguous and arbitrary unit of meaning; units of meaning can be larger and smaller than “a word.” A "word" can be used alone—lap—in a compound word—laptop—or within a phrase—lap of luxury—and communicate something different each time!
Words even have connotations that are sometimes hidden. They might "literally" have a neutral meaning, but be used exclusively in negative contexts! In the linguistics literature, this is called semantic prosody. For example, the English word "spread" literally means "to expand or extend across an area." And yet, an investigation of how it is used in context shows us that it has a negative semantic prosody. We talk about diseases, cancers, and viruses as "spreading." When we talk about positive things, we use words like "growing" or "advancing" or "expanding!"
If we're translators, we need to understand these inter-linguistic relationships in both languages. We need a sense of word connotation, not just of literal meaning, or we may mis-understand an inference the author is making; we may choose an inappropriate translation term; or, we may misunderstand the source text (by mistaking a word's secondary use as a primary use, for example).
4. Words depend on languages
On top of all that, even if words were literal, they never "literally" mean anything in another language. Languages are self-contained worlds, worlds that stand on their own, and are self-referential. When I speak in English, I don’t “mean anything” in Tibetan—my words make sense in the English-only context in which they were uttered. Tibetan utterances, likewise, have no inherent English meaning—they only have a Tibetan meaning.
What I’m getting at here is that reality, whatever it is, is a vast sea of undifferentiated phenomena. And that our cognition, it seems, somehow does the work of filtering and categorizing it. Our mind is constantly searching for, and then constructing, patterns out of our raw sensory data. From this perspective, language is a tool we’ve inherited from our ancestors that help us match patterns, and communicate them (in useful ways) to our companions.
The key point, though, is that languages have solved the problem of “how to split up reality into useful objects” in different ways. And that means words across languages vary in the way they draw boundaries, even in the physical world. These variances aren’t just superficial; they can be fundamentally different, even at the deepest, most subconscious level.
As we've already discussed, words are inherently ambiguous. Again, if I say, "I'll go get some coffee," you literally don't know what I mean (unless I give you the context, or unless the context is given by experience). Similarly, if I exclaim, "Ow!" you know that I encountered a sudden pain. But, there is still ambiguity—you don't know what kind of sudden pain I experienced. Was I burned? Pinched? Hit? Did I knock into something?
In Tibetan, there are two possible translations of "ow!"—ཨ་ར་ and ཨ་ཚ་! When a Tibetan speaker encounters a sudden pain that is sharp or hot, they spontaneously utter ཨ་ཚ་ (atsha). If that pain is dull or blunt, the word used is ཨ་ར་ (ara). The point is that all words in all languages are always ambiguous to some degree. Reality is too complicated to be otherwise! But, all words in all languages aren't ambiguous to the same degree! In this case, Tibetan is less ambiguous than English: