In psychology, the literature review is typically a specific section of a research paper/article that articulates what is already known on the topic at hand. We think about the literature review in two ways, exploratory and explanatory.
The exploratory phase is when you, as the researcher, search the literature on your research question to learn more about the topic and determine what resources you will use in your own research. You are exploring pre-existing knowledge to gain deeper understanding of the topic.
In the explanatory phase, you succinctly write a thorough summary of the research done on the research topic. This often includes descriptions of findings and research methods used in prior studies. This section of your research paper is intended to bring your audience up-to-speed on the topic as well as demonstrate your expertise in the area.