Found in the 20's by Lilienstern, Liliensternus was not named and described until 1934 by Friedrich von Huene. Huene and Lilienstern both were German paleontologists of the early 20th century, Lilienstern also working in the late 19th century a tad, who were well known in their native land and not unheard of in other scientific circles. Liliensternus, therefore, was accepted by the community after Huene described the animal, but it faced a significant problem. Lacking a good portion of the skull, no one was entirely sure where the animal fit in the theropod family tree. Certainly it was a very early dinosaur, Late Triassic at the latest, and it possessed traits which caused it to bridge a gap, figuratively of course, between some slightly more advanced theropods and some slightly less advanced theropods (these being animals that were amongst the first animals recognized as dinosaurs and not large lizards). Where should Huene place the animal in terms of its family then?
Believing, at the time, as paleontologists did, that the ceratosauria and coelophysid families were of the same primitive stock and noticing that Liliensternus had significant traits of both groups, Huene placed Liliensternus in the ceratosauria, which at the time also included the coelophysid animals of the Late Triassic. Therefore, Liliensternus was placed in a group of animals which typically had some sort of fancy hood ornament and it was thus assumed that Liliensternus must also have one. Nearly 60 years later the family lines were redrawn and Lilienstenrus is now considered not a ceratosaur, but a coelophysid; and early gracile theropod with no hood ornaments. The skeleton up to the head certainly plays out this gracile model quite well and we therefore now have a new family system for Liliensternus which seems to fit very well.