Stages of liver damage: Healthy, fatty liver, fibrosis, and cirrhosis
From Dr Bret Scher at DietDoctor:
Fortunately, we have emerging evidence that low-carb and ketogenic diets improve fatty liver while also helping with glycemic control and weight loss, an impressive combination rarely seen with medications. As we reported earlier, studies have shown that carbohydrate restriction changes liver metabolism, stimulating the breakdown of liver fat. Another study mentioned in the same post showed that when children substitute complex forms of starch to replace sugar, they experience reduced amounts of liver fat.
Yet another impressive study found that despite equal weight loss, a low-carb Mediterranean diet was better than a low-fat diet for reversing liver fat and signs of NAFLD. And finally, Virta Health published a subset of its data showing that one year on a ketogenic diet improved non-invasive tests for NAFLD and liver scarring.
Source: Limiting Carbs Likely Better Than Drugs for Fatty Liver — Diet Doctor
Steve Parker, M.D.
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Paleo Diabetic 
I follow the ADA well balanced diet for 42 years as a type1 and I no fatty liver.
The last sentence in the first paragraph has the starch and sugar transposed. They sub complex starch in place of sugar, not the other way around.