A fatty liver refers to an abnormal accumulation of fat within liver parenchymal cells.
Alcohol, at least in industrialised countries, is the most common cause of fatty liver. Other cases include disease, drugs obesity, and rapid weight loss.
There is some complicated chemistry involved but it is not fully understood yet. Basically fatty acid formulation is increased in the liver as its utilisation is diminished and there is a build up.
If you fancy the more than occasional alcoholic drink, be warned, alcohol is a hepatotoxin (liver poison) that alters mitochondrial and microsomal function of cells.
Fatty change in the liver is universal 3 to 7 days after a large amount of alcohol is consumed. It lasts for 2 to 4 weeks.