a compilation of everything that has been written on a particular topic
literature criticism (think English) or a book review
So, what is it then?
A literature review is an integrated analysis-- not just a summary-- of scholarly writings that are related directly to your research question. That is, it represents the literature that provides background information on your topic and shows a correspondence between those writings and your research question.
A literature review may be a stand alone work or the introduction to a larger research paper, depending on the assignment. Rely heavily on the guidelines your instructor has given you.
Why is it important?
A literature review is important because it:
Explains the background of research on a topic.
Demonstrates why a topic is significant to a subject area.
Discovers relationships between research studies/ideas.
Identifies major themes, concepts, and researchers on a topic.
Identifies critical gaps and points of disagreement.
Discusses further research questions that logically come out of the previous studies.
What is a Literature Review?: A Tutorial
Literature Reviews: An Overview for Graduate Students
Literature Reviews: An Overview for Graduate Students (by North Caroline State University Libraries)