The term “Live Like a Local” is often translated to mean 'experience a destination as if you are a resident. ' It's good advice, but hard to emulate when you're only in the destination for a short period of time.
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Not sure Webster has defined this one so we'll put forth our subjective definition – traveling like a local means acting on a genuine desire to share the lived experiences of the residents of the destination you're visiting.
In general, by keeping an eye on the people around you, you will avoid tourist traps and be lead to the best spots. When you don't stand out as much from the locals, it's also easier to feel at home, which is one of the greatest achievements when you're traveling around.