Unlike a review of a single book or performance, the literature review, a genre commonly found in fields of academia, is actually a review of one or many books, chapters and articles. A literature review summarizes the central ideas and most important points found in several published works about a single subject and draws conclusions about common threads or ideas in those works.
There are basically two types of literature review:
Survey articles are typically written by senior and well-known scholars and researchers, often by invitation. These literature reviews can be highly prestigious. We will not be dealing with this type of literature review here, although of course much can be learned from seeing how the "experts" sort, survey, describe, and evaluate aspects of the literature in your field.
A literature review that forms part of a research paper, proposal, thesis, or dissertations may occur in one of three forms.
The first type rarely occurs in the Humanities, where types 2 & 3 are more common. Because the literature review is the cornerstone, the foundation of the paper, it is needless to say it is very, very important. In a decent literature review you clearly demonstrate that you know the recent theories in your field of expertise.