Do I need to level the dirt or can I just put sand down to level the ground?

Is the liner right against the earth? The sand might be too abrasive causing wear or could shift when people walk on the pool bottom. You can sort of go around the area with a rototiller, then rake it smooth, spray it with a hose on fine mist to settle it all back down. After it soaks in tramp on it good if you filled in any area.