There isn’t a process called “installation” for lilac’s themes, just tell lilac where the target theme is by editing item theme in config.toml:
[blog] theme = "the-theme-path"
Generally, the themes are under the root of your blog’s directory.
You really should manage your theme in a standalone git repository, and use it as a submodule of your blog’s submodule if your blog is under git versioning too.
For instance, add theme less a submodule of your blog’s repo:
$ git submodule add git://github.com/hit9/lilac-theme-less.git less
If you want to modify a theme created by someone else, just fork his(or her) repo, and then modify it.
But it’s 100% ok to use themes not in the submodule way.