A literal string refers to the text between the opening and closing tag of an HTML control. HTML encoding is when text is converted into a string representation that the browser will display rather than interpret as HTML. Characters such as the question mark (?), ampersand (&), slash mark (/), and spaces might be truncated or corrupted by some browsers, so those characters must be encoded when they appear in a tags or in query strings.
The HtmlDecodeLiterals method is called by the ASP.NET page framework during parsing and is not intended to be called directly in you code.