The Literature Review considers the previously published research which is relevant to your study. This will include, among other things, books, journal articles, reports and theses. It gives an overview of what has already been said or done in your specific area of study; what the prevailing theories, opinions and hypotheses are; and what methods or research sources may be appropriate. It is likely to consider previous work undertaken in your department. In general, you are showing how your work fits into the broader area of your discipline.
The Literature Review is also a critical review of other works. Being critical will enable you to indicate any gaps, weaknesses or areas requiring extension in your specific topic area. By doing this, you are justifying the need for your research. Your Literature Review may end with a section stating the aims and objectives of your own study if you have not already covered this in the Introduction.
It is important to note that in your Literature Review you must only include information which is relevant to your research question(s). Published work which is relevant only to your results and/or their interpretation should be reserved for the Discussion section.