Lookups in applications are used to represent a set of codes and their translated meanings. For example, a product team might store the values 'Y' and 'N' in a column in a table, but when displaying those values they would want to display "Yes" or "No" (or their translated equivalents) instead. Each set of related codes is identified as a lookup type.
Lookups are codes that are defined in the global FND_LOOKUP_VALUES table, which is striped into multiple virtual tables using a VIEW_APPLICATION_ID column. Every product team who owns the lookups specific to their product provides a database view and ADFbc artifacts built on the top of the database view.