This discussion may contain spoilers!
Before you read this thread, please view this --> http://www.telltalegames.com/community/discussion/57012/where-lilly-is-now-
In the link, I explained how and where Lilly may have went after Episode 3 of Season One. Here, I will be explaining my theory based on the information in both the link and personal POV. Now, before the Kenny lovers dislike this thread to Hell, let me just make this clear: I do not hate Kenny nor do I 100% believe he is dead, but I don't necessarily hate Lilly, either (despite her horrible action) nor do I think she is dead, so just to make that clear. Let's begin, shall we?
First, the link above: click it. I will be making many references based on the information in that link, and if you don't read it, you may be confused. My theory (if she steals the RV) is that she makes it to a nearby city/town (despite the radiator, in the link above, it shows that she could have easily made it to Pearson or further). Trying to survive, she looks for supplies. Now, we don't know what happens to her after she takes the RV, but my guess is that she survives on her own a few months, then stumbles upon a group. This group may be a bandit group or just a normal group, but my guess is that she showed she could be a good leader for the group (keep in mind that Lilly's leading style is all about survival, not necessarily about right and wrong. Also keep in mind that this is theorized to be several months after her fathers death; before her leadership abilities were hindered based on distrust and paranoia: now I believe she would have accepted his death and moved on.) and ends up leading the group north, probably hearing the rumors about Wellington from the new group, later in the year. They then stumble upon Luke's group (or part of it) on their way there. Knowing Lilly, she probably had a bad feeling about the group and accused them of robbery (we don't know if Luke's group did anything wrong to them before hand). Clementine steps forward and sees Lilly....
"I thought you were dead!"
Again, this is just a theory and there may be things wrong with it. If you see anything wrong with the theory, by all means, comment about it. If you wish to add anything to this theory or want to post your own theories, I encourage you to share your thoughts. Do you agree? Disagree?