Don't ever name a python package with .py extension.

Let's say we have folling directory structure:

site-packages/
  |- liquid.py/
       |- liquid/__init__.py

If you also have site-packages/ in your PYTHONPATH, then site-packages/liquid.pyc will be generated, instead of site-packages/liquid.py/liquid/__init__.pyc.

Observed with python 2.7.