I have an 04 disco I went to put a hitch into the factory receiver but it wont fit
not sure why but it is a hair to big
do the discos factory receiver not accept universal hitches? when I say hitch I am referring to the piece that slides in that has the ball mounted to it

 

My hitch is universal, and I have a 3 ball hitch(but it has no drop and is a little too high).
Both slide in and out of my 04's factory reciever fine.
It's not supposed to be a tight fit.
The hitch pin and weight of the trailer will keep the hitch from wobbling or moving in the receiver.
Why do you think your reciever is too big/hitch too small?
Have any pictures?

 

The receiver is a standard 2", and the ball mount would be the same > Towing / Trailer Mount For Land Rovers: 2 Inch Drop, 8 Inch Tube, 6,000 lb Rating > https://www.etrailer.com/Ball-Mounts/Curt/C45036.html.
Check for rust, mud, etc in the receiver hole. Also check the powder coat/ paint on the ball mount is not too thick. Post a pic if you can.

 

I've got the factory receiver set up on my '04 and it's a standard 2". I've had everything from various ball mounts to two different bike racks that fit into it just fine.

Assuming you have the factory receiver then it's got to be something clogging up your receiver or the ball mount you have isn't sized properly.

Option #2 is that you have an aftermarket receiver that isn't 2"...