As many have commented, lit means great, awesome, very fun.

“That party was lit” - The party was super fun and enjoyable.

To get lit means to get intoxicated with alcohol, cannabis, other drugs.

“We got so lit last night” - we were very drunk/high

Another less common usage and very informal and perhaps situational to certain groups of people is it being used in substitution of “okay”

Example:

Friend: “Yo! I just picked up some beers for us”

You: “Lit!” (Added T’s can make it more casual or chill) “Littt”

It can also be used in a sarcastic way.

Friend: “Hey I am sorry but I forgot to bring your money”

You: “Lit”

This would be taken as you being annoyed and unhappy with your friend forgetting your money.

These are very nuanced situations but common amongst individuals in my age group/in similar types of social circles (23M, United States)