Who is this character? Well, she's somebody fans of the comics have wanted to know more about for some time, and The Fall of the Governor combined with the next installment, titled Descent, seem to fill some of the holes that fans have been wondering about for years.
Though she only appeared in the comics for a short time, Lilly left an indellible mark on the world of The Walking Dead, and her character served as part of a matrix of characters merged together to form the basis of a similarly-significant character on the TV series based on the comic.
In the Season Four episode "Live Bait," fans met Lilly Chambler, played by Audrey Marie Anderson. By the time that episode aired in November 2013, Anderson was already no stranger to playing comic book characters, appearing on Arrow as Lyla "Harbinger" Michaels, a role that she has periodically played since.
Lilly Chambler is an amalgamation of two separate characters from The Walking Dead universe: April Chalmers, who appears in the novels The Road to Woodbury and The Fall of The Governor; and Lilly Caul, who appeared in the comics.
In the comics, Lilly Caul appeared only in three issues -- #43, #46 and #48 -- before disappearing, never to be seen again unless, as some fans have speculated, that's her we see on the cover of The Walking Dead #127. That seems unlikely, if only since any role she would play going forward would have to be reworked in the TV series, since Lilly on TV has already been killed, as established in dialogue between Tara and Glenn in “Inmates.”
That's because after Lilly Chambler killed The Governor in "Too Far Gone," just as Lilly Caul did in The Walking Dead #48, Tara says she just kept on walking into the zombie-infested prison yard to be swarmed and consumed.
On television, of course, the reason she chose to allow herself to die is the same reason she killed The Governor; while following his crazed lead, her sister Tara left Lilly and her daughter Meghan waiting in an unfamiliar landscape, where bad luck and inattention came together and Meghan was attacked and killed by a walker. This left Lilly furious and shellshocked, and when she found Tara, The Governor and the rest at the prison battle, she confronted and eventually killed him over it.
In the comics, the source of her fury was a bit different; brought along as part of The Governor's invasion force, she shot and killed Lori Grimes as she was attempting to flee the prison, carrying the newborn Judith in her arms. Lori fell on and crushed the baby, resulting in Judith's death and sending Lilly into a state of shock. She blamed The Governor for the fact that she had just killed an innocent child and killed him.
Ever since then, there has been some question on the part of readers as to whether Lilly, or any of the rest of the invasion force, survived. The Prison was a beloved setting, and some have wondered whether Lilly and company would have tried to set up camp there in the relatively fortified (if they could get the walkers brought on by the battle with The Governor cleared) environment, or if they would have tried to head back to Woodbury.
Of course, for as long as readers have wondered, it's been fairly clear they wouldn't get a solid answer in the pages of The Walking Dead. Lilly was never a major part of the series — she seemed brought in primarily to kill The Governor, and once she served that function, she vanished. Her reappearance as a focus, and the attendant revelation that she survived the chaos around the prison siege, would arguably be a major cultural shift in the comics. Generally, any character not explicitly killed when they exit the audience’s field of view is implicitly killed (as if the readers leave you for dead when shifting to another focus in a world this dangerous).
That said, her fate was dealt with in The Fall of The Governor, in which she was far more fleshed-out than she ever was in the comics. Having failed at a previous attempt at a coup in Woodbury, Lilly was likely lucky just to be alive by the time they invaded the prison. She was fairly unstable already, having taken over for The Governor after his beating and mutilation by Michonne left him in a coma; the stress of running Woodbury while at war caused her to miscarry a pregnancy, for which she blamed Rick Grimes's incursion into Woodbury.
After killing The Governor, though, the area around the prison became overrun with zombies, causing the Woodbury survivors to run inside for safety. Of the two dozen or so Woodbury residents who staged the attack on the prison, a quarter survived and, under Lilly's leadership, made their way back to Woodbury where she successfully took over leadership. Under Lilly, the plan appears to be to resume inviting refugees in to live with them, with slightly less of the insanity and violence that marked The Governor's reign.