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Literal translation, or directed translation, is the rendering of text from one language to another "word-for-word" (Latin: "verbum pro verbo") rather than conveying the sense of the original. (This distinction is valid only when a literal translation does not accurately convey the sense, which is not invariably true.)
In translation studies, "literal translation" denotes technical translation of scientific, technical, technological or legal texts.
When considered a bad practice of conveying word by word (lexeme to lexeme, or morpheme to lexeme) translation of non-technical type literal translations has the meaning of mistranslating idioms, for example, or in the context of translating an analytic language to a synthetic language, it renders even the grammar unintelligible.
Term as used in translation studies 
The term "literal translation" often appeared in the titles of 19th-century English translations of classical, Bible and other texts.
Literal translations ("cribs," "ponies", or "trots") are sometimes prepared for a writer who is translating a work written in a language he does not know. For example, Robert Pinsky is reported to have used a literal translation in preparing his translation of Dante's Inferno (1994), as he does not know Italian. Similarly, Richard Pevear worked from literal translations provided by his wife, Larissa Volokhonsky, in their translations of several Russian novels.
Poetry to prose 
Literal translation can also denote a translation that represents the precise meaning of the original text but does not attempt to convey its style, beauty, or poetry. There is, however, a great deal of difference between a literal translation of a poetic work and a prose translation. A literal translation of poetry may be in prose rather than verse, but also be error free. Charles Singleton's translation of The Divine Comedy (1975) is regarded as a prose translation.
Used to imply bad practice 
"Literal" translation implies that it is probably full of errors, since the translator has made no effort to convey, for example, correct idioms or shades of meaning.
A literal English translation of the German word "Kindergarten" would be "children garden," but in English the expression refers to the school year between pre-school and first grade. Literal translations in which individual components within words or compounds are translated to create new lexical items in the target language (a process also known as “loan translation”) are called calques, e.g., “beer garden” from German “Biergarten.”
Literal translation of the Italian sentence, "So che questo non va bene" ("I know that this is not good"), produces "Know(I) that this not goes(it) well," which has English words and Italian grammar.
Machine translation 
Early machine translations (as of 1962 at least) were notorious for this type of translation as they simply employed a database of words and their translations. Later attempts utilized common phrases which resulted in better grammatical structure and capture of idioms but with many words left in the original language. For translating synthetic languages, a morphosyntactic analyzer and synthesizer is required.
The best systems today use a combination of the above technologies and apply algorithms to correct the "natural" sound of the translation. In the end though, professional translation firms that employ machine translation use it as a tool to create a rough translation that is then tweaked by a human, professional translator.
Often, first-generation immigrants create something of a literal translation in how they speak their parents' native language. This results in a mix of the two languages in something of a pidgin. Many such mixes have specific names, e.g. Spanglish or Germish. For example, American children of German immigrants are heard using "rockingstool" from the German word "Schaukelstuhl" instead of "rocking chair".
Literal translation of idioms is a source of numerous translators' jokes and apocrypha. The following famous example has often been told both in the context of newbie translators and that of machine translation: When the sentence "The spirit is willing, but the flesh is weak" (дух бодр, плоть же немощна, an allusion to Mark 14:38) was translated into Russian and then back to English, the result was "The vodka is good, but the meat is rotten" (спирт, конечно, готов, но мясо протухло). This is generally believed to be simply an amusing story, and not a factual reference to an actual machine translation error.
See also 
- All your base are belong to us
- Chinese-ordered English
- Dynamic and formal equivalence
- Young's Literal Translation (of the Bible)
- Olive Classe, Encyclopedia of literary translation into English, vol. 1, Taylor & Francis, 2000, ISBN 1-884964-36-2, p. viii.
- John Hutchins, "The whisky was invisible", or Persistent myths of MT, MT News International 11 (June 1995), pp. 17-18.
- What is a literal translation? from LinguaLinks Library.