"rest horizontally, be in a recumbent position," Middle English lien, from Old English licgan (class V strong verb; past tense læg, past participle legen) "be situated, have a specific position; remain; be at rest, lie down," from Proto-Germanic *legjan (source also of Old Norse liggja, Old Saxon liggian, Old Frisian lidzia, Middle Dutch ligghen, Dutch liggen, Old High German ligen, German liegen, Gothic ligan "to lie"), from PIE root *legh- "to lie down, lay."
Especially "to lie in bed," hence often with sexual implications, as in lie with "have sexual intercourse" (c. 1300), and compare Old English licgan mid "cohabit with." To lie in "be brought to childbed" is from mid-15c. To lie to at sea is to come to a standstill. To take (something) lying down "receive passively, receive with abject submission" is from 1854.