We report low-frequency high-resolution Raman spectroscopy and ab-initio calculations on dense lithium from 40 to 200 GPa at low temperatures. Our experimental results reveal rich first-order Raman activity in the metallic and semiconducting phases of lithium. The computed Raman frequencies are in excellent agreement with the measurements. Free energy calculations provide a quantitative description and physical explanation of the experimental phase diagram only when vibrational effect are correctly treated. The study underlines the importance of zero-point energy in determining the phase stability of compressed lithium.