Use "lie" when the subject is the one doing the reclining, as in "I will lie down for a nap." Use "lay" when the subject is placing something else in a horizontal position, as in "I will lay the book on the table."
The past tense of "lie" is "lay," as in "I lay down for a nap yesterday." The past tense of "lay" is "laid," as in "I laid the book on the table."
Context matters in English because the meaning of words can vary based on the surrounding words, phrases, or situation. Words often have multiple meanings, and the intended sense becomes clear through the context in which they are used.
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