Sounds like you need to use cross references as opposed to typing in the figure number by hand.
Firstly make sure your figure exists and you have inserted a caption correctly (right click on picture/figure and select "insert caption". Choose the type of prefix - in your case Figure - the position and other options and then Insert)
When you come to the ""...as shown in figure xyz" bit type the ""...as shown in " part and then insert the cross reference as follows:
- Choose the 'Reference' tab
- Choose 'Cross-Reference' (part of the Captions block)
- Choose reference type 'Figure'
- Select the caption from the list
- Choose what part of the caption to reference (in your case you want
'Only Label and number'
- Choose inset
This sets the cross reference in the form of a field code.
In order to update all the references if stuff is moved around you need to update the fields. To do this, select the whole document (triple click in the left margin) and press F9. A similar effect can be achieved by print previewing the document (as long as the default update fields on printing option is still set). Individual codes can be updated by selecting the code (it will show a grey background), right clicking and then selecting 'Update Field'.
On a related note, setting up captions in this way allows you to have an auto updating Table of Figures and Table of Tables along with the Table of Contents should so desire.