Litang is quite a center of Tibetan secessionist activities. Pictures of Dalai Lama are technically illegal. There is a strong police and military presence due to the tension but you will hardly notice it.
August horse festival has had incidents in the past. Such incidents with no casualties happened in 2006 because of a dispute over results and in 2007 over a call for the return of the Dalai Lama. Check out the current situation on some Tibetan news sites like www.phayul.com
As with many towns in the area, Litang is quite dusty, so those who are sensitive to dust should exercise precaution. Locals often wear homemade cloth dust masks, and they are cheaply and easily available in town.
Because of the altitude, travelers should be alert for signs of altitude sickness.