Lihzahrds are enemies found only inside the Jungle Temple. They initially move as ordinary walking Fighter AI enemies. As soon as their health is reduced to below 55% (220 / 440 / 660), they enter their second, crawling form, which consists of a more lizard-like creature running on four legs. In this form they are much faster, have additional damage and defense, and are immune to knockback, but have reduced jump height.
While the Jungle Temple is usually only accessed after Plantera has been defeated (although there are unconventional methods to enter prior to that; see details), Lihzahrds and Flying Snakes can be made to spawn even before Hardmode begins, by standing in front of natural Lihzahrd Brick Walls at the entrance to the Temple.
Lihzahrds will spawn on any Lihzahrd Bricks as long as the player is in front of a natural Lihzahrd Brick Wall, specifically behind the middle right space that the player occupies.
Lihzahrds can phase through walls if they enter their second form while against the wall.
"Lihzahrd" is pronounced the same as "Lizard".
May possibly be a reference to "lizardmen" or "lizardfolk", which is a reptilian species of aliens some conspiracy theorists belive to rule the world.
The Witch Doctor is a Lihzahrd, as can be seen by his green skin and tail. This is especially evident by his party quote, "I wanted to see how your kind celebrate", which would indicate he is not human. This has also been directly confirmed by Leinfors on the Terraria forums.
While this would make him the only non-hostile Lihzahrd in Terraria, he can be seen befriending two Lihzahrds in a cutscene in the credits.
The Bestiary entry for the Lihzahrd: "A reclusive race of reptilian folk found exclusively in the mysterious jungle Temple. They look primitive, but are quite advanced."