Most LANs today run under Ethernet.
If you connect two computers for sharing data, you have a LAN. The number of computers connected on a LAN may be up to several hundreds, but most of the time, LANs are made up of more or less a dozen machines.
To connect two computers, you may only link them using a cable. If you want to connect more, then you need a special device called a hub, which acts like a distribution and link point. Cables from the different computers LAN cards meet at the hub. If you want to connect your LAN to the Internet, then you need a router instead of a hub. Using a hub is the most common and easiest way of setting up a LAN. There are however other network layouts, called topologies. Read more on topologies and network design at this link.
You dont necessarily have only computers on a LAN. You can also connect printers and other devices which you can share. For instance, if you connect a printer on a LAN and configure it to be shared among all users on the LAN, print jobs can be sent to that printer from all computers on the LAN.

