vic,
The guitar is technically a transposing instrument. By convention it is notated one octave higher than it actually sounds. This is to keep the notes nicely spaced across the treble clef.
However, LilyPond does not transpose guitar tabulature by default. The notes you input are the actually sounded notes.
To transpose the notes down an octave, simply add \transpose c' c {} around your music.
%%%
\score{
% c major and minor
\new StaffGroup{
<<
\new Staff{ \keyTime \cMajor \cMinor }
\addlyrics{ do mi so CM do mi(b) so cm }
\new TabStaff{
\transpose c' c { \cMajor \cMinor }
}
>>
}
\layout{}
}
%%%
Best Regards,
Greg