Living in a garage can be legal as long as the garage is made into a legal livable space.
In some places you may need to get a permit to remodel the garage into a livable space and then get an occupancy permit as well.
Some places do not require permits or an occupancy permit depending on the location.
But as long as you make the garage livable then yes you can live in a garage.
You can also make a garage into an additional bedroom which is what my dad did for me as a kid and we needed more room.
My dad turned the garage that was attached into a bedroom for me and put drywall on the walls and made it into a nice bedroom.
Some people also make garages into apartments and rent them out to people which is legal in some places as well.
Just check with your local zoning and laws to be sure it's legal.
Of course if you live out in the country and not in town then you can turn the garage into a livable space or live in the garage as is without any need for permits.