A light source is an item that will produce light when used in the world. This will allow players to explore the dark underground or decorate their buildings on the surface.

Many of Terraria’s achievements will unlock as ... No Hobo Build an NPC-livable house, with a door, seating item, surface item, light source, and walls. Stop! Hammer Time! Obtain a hammer.

A chain lantern is a light source that can be attached to ceilings. Chain lanterns by default are used to light parts of the Dungeon. They cannot be crafted and are only found in the Dungeon.