The Collaborative International Dictionary of English v.0.48:

Lieu \Lieu\ (l[=u]), n. [F., OF. also liu, leu, lou, fr. L.
   locus place. See Local, Locus.]
   Place; room; stead; -- used only in the phrase in lieu of,
   that is, instead of.
   [1913 Webster]

         The plan of extortion had been adopted in lieu of the
         scheme of confiscation.                  --Burke.
   [1913 Webster]

WordNet (r) 3.0 (2006):

lieu
    n 1: the post or function properly or customarily occupied or
         served by another; "can you go in my stead?"; "took his
         place"; "in lieu of" [syn: stead, position, place,
         lieu]

Moby Thesaurus II by Grady Ward, 1.0:

25 Moby Thesaurus words for "lieu":
   abode, area, bearings, bench mark, district, emplacement, hole,
   latitude and longitude, locale, locality, location, locus,
   pinpoint, place, placement, point, position, region, site,
   situation, situs, spot, stead, whereabout, whereabouts



Bouvier's Law Dictionary, Revised 6th Ed (1856):

LIEU, place. In lieu of, instead, in the place of.