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Commonly known as LED(Light Emitting Diode), it is actually a p-n junction diode which is capable of emitting light. A LED operates like a regular p-n junction diode.
Diodes have to be forward biased for current transfer.

What makes a LED different from a regular diode is the semiconductor material which is used to form the p-n junction regular diodes which are generally made of semiconductor materials like Silicon or Germanium; whereas LEDs are made of materials like Gallium arsenide (GaAs) compounds and Indium(III) phosphide (InP) compounds.

In a regular diode, when current flows, energy is thrown off in form of heat. In light emitting diode, an electric current passing through the diode causes the light in the visible portion of the electromagnetic spectrum to be emitted.

LEDs can emit lights of different colors. The color of the light emitted usually depends on the semiconductor material used to fabricate the p-n junction in the diode. For example, Gallium arsenide phosphide (GaAsP) is used to make LED that emit red light and Indium gallium nitride (InGaN) for blue LED.
You would have seen several electrical devices that use LED. Using LEDs to provide visual indication in displays is very common. Some times many LEDs are packaged together to form numeric display. You even would have seen these displays on your microwaves or your washing machines for setting timers.
As LED of the higher power is developed and optics for LED evolves, LEDs are being used increasingly to replace incandescent lamps and area lighting. They are used for the UV-based water purification system as well.

I hope the article was informative. Please do comment and let me know.