Dr. Andrew McLean in his book Equitation Science poses a question that dressage cues can be so similar for different things that horses can easily get confused how to respond. It is a very valid point. Our job as riders/trainers to make sure that cues are very clear, black and white, consistent and repeatable. This way a horse learns that his world is very predictable and he knows what to do in order to get release from pressure, get reward, etc.
One of those grey areas is how a horse can differentiate from an aid for lateral flexion and an aid for steering?

I can give an answer in two sentences. A lateral flexion is asked basically only with the hand. A steering request is asked from a seat provided there is very consistent and true connection between seat, legs, hands and a horse.

Riders who have experienced that know exactly what I am talking about. The riders who are not yet skilled enough will go:"Uh???" Explaining this is not easy. As a rider gains more and more experience and learns to control his/her own balance from strong core, stable upper body, supple hips, connected arms and legs they start to ride more and more from the center of their own body, hence, from the seat. The legs and arms/hands become an extension of that centre. When that starts to happen riders become quieter, they are less concerned with rein aids, the leg aids become less obvious though more important. If you have doubts watch videos of very good riders ride corners, turns on centerline, small circles. You will not see obvious aids for turning, horses appear to turn on their own.
Lets look at some technical details.

Lateral Flexion - is a slight turn of the horse's head to one side. The anatomy of lateral flexion is turning and bending of the front of the neck vertebras starting with the second one called axis. The first vertebra only allows horse's head to move up and down. If the horse's body is balanced and he is not using his neck/head for balance his head is free to move. That is why the easiest way to introduce lateral flexions to horses is at a stand still from the ground. This way they learn to follow the rein quietly, learn not to move their feet and learn to detach their balance from the slight movements of the head asked by a person. The next steps will be progressing to ask for flexions under saddle first at halt then at walk and so on until it becomes an action purely invited by play of the reins provided horse's body is in good balance and he does not need the head to balance himself. An example, if a human is flinging his arms on a beam for balance he is not free to use them in any other way.
From above statements, it is clear that easy flexions lateral or vertical will not happen until a horse gains sufficient straightness, balance and strength to not rely on his neck/head to move himself.
The riders must also be very careful when asking only for a flexion not to change their balance by unconsciously moving over, twisting, leaning, etc as that would signal something else to a horse besides just a flexion.

Steering - is a turn. If a horse is moving sufficiently forward it will start a turn with front feet, hence shoulders. At liberty horses lean their shoulders into a turn and use their neck to counterbalance. So technically barrel racing is more natural to a horse then well balanced dressage turn. In dressage the turn requires a horse to stay level through shoulders, back and hips, lifted through the ribcage and step well under himself to carry the turn, otherwise, leaning is inevitable. In order to execute a good dressage turn the whole horse must stay connected, upright, engaged and supple enough to go through the turn feeling at ease, balanced, effortless. Old masters recognized this problem complaining that going straight is easier then turning. That is why if a rider leans in and pulls inside rein to turn a horse, it automatically evokes horse's natural, built-in way of turning - leaning and counterbalancing with the neck, hence, heavy rein.
A balanced turn requires a rider to guide horse's shoulders (both reins), to sit slightly into inside of his/her body from shoulder down through the core into seatbone, inside knee and leg to be a "pillar", the outside "pillar" is slightly behind the inside "pillar". A correct turn gives a sense of hind legs pushing the shoulders forward into a turn through the horse's body. If a horse is tipped the hind legs will not travel on the line of a turn and one hind leg will be stiffer sending energy to the side on a tangent, with added weight of a rider to deal with the horse will stiffen his body to control himself, will use his neck and will not feel manageable, comfortable and supple. He simply cannot.

One of the ways to improve the skills of steering is to learn/practice turn on the haunches. It does not need to be a full or even half turn and it should not be tight. A square of 10 m size in walk where each corner is a quarter turn is a great simple exercise.
Turn on the forehand in motion is another very useful exercise to learn how to coordinate the aids, connect a horse as a unit and activate his hind end. 10 m square can serve for that as well. Each corner of a square is a quarter turn on the forehand.
During normal turns such as corners or circles even in faster gaits thinking of one of the above turns can help improve horse's balance. Which turn to choose depends on the issues happening during steering. Turn on the forehand idea can improve horse's way of stepping under himself and steady his shoulders from running and turn on the haunches can encourage a horse to engage behind and turn the shoulders.
One more useful idea is riding turns/circles with counter flexion, helps to switch rider's focus on using more "outside" rein during the turn while attempting to counter flex the horse.

Happy riding...