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Lividity, or livor mortis, is the gravitational pooling of blood in the body after death. It starts occurring pretty much as soon as blood circulation ceases. It's a dark reddish purple coloration of the skin that's usually fully evident after about 3-4 hours and fixed after 8-12 hours. I think a lot of people here probably know about rigor mortis, the stiffening of the body after death and how rigor mortis eventually goes away? Livor mortis, or lividity, doesn't go away after it's fixed and even moving the body position will not cause it to disappear after that point.
Lividity is evident not only on the skin but also in the internal organs. So even if injury to the skin or other factors made it hard to see externally, internal examination would reveal it.
The physiological mechanism that causes lividity can be pretty variable among individuals so just by itself, it can't be used to yield an exact time of death. However, it can be an indicator of body positioning. For example, if someone died facedown and was left that way long enough for lividity to occur, then was transported from the murder scene and dumped on his back at a later point in time, the forensic examiner would know that the body had been moved at some point. Lividity would be looked at in conjunction with other characteristics of the crime scene, not by itself, to determine if a body had been moved.
This was all MOO and decidedly not the cliffs notes version - sorry.