Lily hasn't been gifted much innocence in her young life, and the adults in her life who are biologically related to her seem to constantly erode any sense of innocence she has.
T. Ray verbally and physically abuses Lily from his own emotional brokenness. From making her kneel on grits for hours as punishment to eventually allowing her to live with August with a final "good riddance," Lily lacks any sense of emotional stability from her father, and this chips away at her sense of childhood innocence.
Even more compelling is Lily's relationship with her mother. Though she was young when her mother died, Lily recalls that there was a gun involved in her mother's death and has a feeling that she had something to do with it. Because T. Ray is such a horrible parent, Lily clings in innocent faith to the idea that her mother was a steady and faithful guardian and that if she had lived, Lily's life would have been filled with goodness and hope. Through living with August, she learns that her mother actually left Lily with T. Ray before her death because she suffered from depression. This shatters Lily's world and she believes that her mother never wanted her.
August has to reshape Lily's childlike understanding and help her to see that people are not perfect and that her mother made the best choices she could at the time. August also has to help Lily pick up the emotional brokenness that emerges when she learns that she did, in fact, accidentally kill her own mother—a final blow to any remaining innocence she carried.
Lily's loss of innocence through Deborah and T. Ray's inability to adequately parent her gives way to a more mature understanding of family and a new appreciation for love. She is able to more fully appreciate the love August and the sisters give to her because she sees the sacrifices they have all made to create an untraditional family—but one that has intentionally been formed with a fully aware sense of the difficulties and struggles they all carry with them.