This is the 3523rd most frequent Polish word.
żył
"Żył" means "lived" (past tense of "żyć" - to live).
In this sentence, 'żył' is used as the third-person singular past tense of the verb 'żyć', meaning 'to live'.
On żył kiedyś w małym domku na wsi.
He once lived in a small house in the countryside.
Here, 'żył' serves as the past tense of being alive or existing, combined with 'był' emphasizes a narrative style commonly found in tales.
Żył był bohaterem tej opowieści.
Żył was the hero of this tale.
In this context, 'żył' is the plural form (genitive case) of 'żyła', referring to veins in the body.