We often use figures of speech. Suppose I said to you "I have to go out on stage now. I have butterflies in my stomach." You would understand that I was using an English figure of speech, meaning "I'm so nervous I feel slightly sick to my stomach--as if I had butterflies flying around in it." "Literally" means "according to the letters," that is to say the exact meaning of the words themselves. No analogies, no "as if." "I LITERALLY have butterflies in my stomach"? I sat down to a meal of butterflies and ate them--chewed them up, and swallowed them down, wings and all. "He wrote the book on XYZ" can be a figure of speech meaning "He's an expert on XYZ." For example: "Who can tell me how to use this crazy fax machine? I can't get it to work?" "Oh, go see Joan, she wrote the book on that." She didn't really write a book, she's just the office expert on that fax machine. In your case: "when I say he wrote the book on Religious Iconology, I mean that quite literally" means "I'm not just saying he's an expert, I mean that he is the author of a book. And not just any book, but THE book." That is to say, the most famous, widely read, and standard book about a topic. (This IS "The DaVinci Code," right?) Since "Religious Iconology" is in capitals, I even suppose that the speaker means there is--literally!-- a book entitled "Religious Iconology" by Robert Landon, and that it is the most famous book on the topic.

It means the real dictionary meaning of the word and not the colloquial meaning.