Learn French: Nous lui disons de préparer le biberon. - We tell him to prepare the baby bottle.

This sentence uses an indirect command, which is exactly what your current lesson covers! In French, when you report that you are telling someone to do something, you use the structure dire à quelqu'un de faire quelque chose. The de is required to connect the verb dire to the action they need to do (préparer).

Why does the sentence use lui instead of le for him?

The verb dire requires an indirect object for the person you are talking to. In French, you say something to someone (dire à quelqu'un). Because of that hidden to (à), we must use the indirect object pronoun lui rather than the direct object pronoun le.

Since lui is an indirect object pronoun, could this sentence also mean We tell her...?

Yes, absolutely! Lui means both to him and to her. Without more context, Nous lui disons de préparer le biberon could perfectly translate to We tell her to prepare the baby bottle.

Could nous disons translate to we are telling as well?

Yes. French doesn't have a separate -ing tense like English does. The simple present tense nous disons translates to both we tell (as a general fact) and we are telling (happening right now).