"Lil" is a kind of prefix and is the short form of "little". It is often spelled with an apostrophe as "Lil'" or "Li'l".
When used as a prefix in comic or animation it can refer to a specific style of drawing where the characters appear in a chubby, childlike style. These are normally characterisations of adults (real or fictional) and are particularly common in Manga or satire (such as Lil Bush).
http://www.gbafun.com/thumbs/Lil' Monster.png
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