Fatty liver is also known as hepatic steatosis. It happens when fat builds up in the liver. Having small amounts of fat in your liver is normal, but too much can become a health problem. Your liver is the second largest organ in your body. It helps process nutrients from food and drinks and filters harmful substances from your blood. Too much fat in your liver can cause liver inflammation, which can damage your liver and create scarring. In severe cases, this scarring can lead to liver failure. When fatty liver develops in someone who drinks a lot of alcohol, it’s known as alcoholic fatty liver disease (AFLD).In someone who doesn’t drink a lot of alcohol, it’s known as non-alcoholic fatty liver disease (NAFLD). According to researchers in the World Journal of Gastroenterology, NAFLD affects up to 25 to 30 percent of people in the United States and Europe.