I have a downstairs room with a door that opens to the inside of the lower lever - but no windows. My neighbor says that's not "legal" for a bedroom. What are the requirements for a legal bedroom? I would like to modify it to comply, if possible. Thanks.

Most local codes require that a bedroom have a window or door to escape to the exterior in case of fire.

... and the bottom of the window couldnot be more than 3 ft from the ground

Grade floor openings shall have a minimum net clear opening of 5 square feet with a minimum width 20", minimum height 24", maximum sill heigt of 44" above the floor.

All good answers but glassdoc nails it best. Tell tcb why the dimensions are important and what constitutes an egress.

You will also need a Smoke Detector inside and out of Bedroom door, and Wireless Interconnected Smokes may be a solution for a distance between areas, and no way to get interconnect wire, between the 2 sets of Smokes.
Also a Switch for a Light(s), or switched receptacle.