Inside the hollowed interior lay a small package wrapped in wax paper.
The boy lay on the bed and dreamed away the afternoon. [preterit, simple past]
The boy was lying on the bed, dreaming away the afternoon.
Most days, the cat lies on the windowsill to look out the window.
He has lain in the sun so long this morning that his mind is fuzzy.
lie, lay, lain = to be in a prone position on a surface in a prone or supine position. Either a person, animal, object or an alien [that's a joke]. Yes, it is intransitive.
VERSUS: lay, laid, laid, a transitive verb meaning to place something somewhere
She lay her head on the pillow and went to sleep.
We laid our coats on the bed and went into the dining room.
The chickens have laid a lot of eggs this autumn. [idiomatic expression: to lay eggs]