So a LUN is a sort of way to identify the storage that is allocated to a device. It is a very abstract identifier when viewed at a high level and only has relevance when put into context.
There can also be multiple different LUN designations for the same storage allocation, depending which side of the connection you are looking at (Array side LUN and device side LUN).
LUN is also used as a term to denote a storage allocation, ie "Can you assign a new 1TB LUN to my server."
So like I said LUN can be a very abstract term without context, so do you have more information on what exactly you are wanting to know about it?
LUN's are now used in ISCSI communication between a NAS that supports ISCSI Target(s) and the PC Requesting a data connection.
you can make a LUN about any way but it represents almost a DNS address in a sense, it also carries and identifies what LUN you want to attempt to connect too as most storage array's will not just put a massive disk on one unit.
a LUN will normally have a hostname, date, and target name associated with it.
for example, a lun may be looked at as
iqn.2006-01.com.openfiler:tsn.343421488512454
note the iqn, date, domain, and target identifiers (this is not a real LUN, just an example of what one "might" be)
think of it as carving out a dedicated space for a device, server, etc .... about anything you can think of. you can have multipule pc's connect to one LUN to share, which is great for VMWare to do DRS and HA for example.