Lightning, put simply, is an electrical discharge. Essentially it is sparks, but the term lightning is used when this happens on a far larger scale than you would get stroking a cat with a piece of plastic. Lightning is associated with thunderstorms and although stunning to watch, can be rather destructive.
Thunderclouds are dense cumulonimbus clouds and at a certain height and temperature some of the water vapor that forms them turns into water and ice. These collide producing electrical charges, negative and positive. Enough collisions, and the separation of negative and positive particles, and you get enough of a charge to form lightning.
Your chances of being hit by lightning are slightly higher than most people realise, although your chances of surviving are also higher. One in three million people will be struck by lightning, which is a lot more than will win the lottery. However this will only be fatal for one in ten of the unfortunate victims.
Not all lightning is the same. The most common type might be terrifying to small children and animals but is not particularly dangerous. This is cloud to cloud or in-cloud lightning.
When this illuminates the entire sky and you cannot see the actual discharge it is known as sheet lightning. Sometimes you will see the lightning shoot from one cloud to another, sometimes it is restricted to the one. Usually it goes from the negatively charged bottom of the cloud to the positive charge at the top.
However when most people picture lightning they are more likely to be thinking of cloud to ground lightning. This is the most familiar type and also the most dangerous. The electric discharge shoots from the negatively charged cloud to the positively charged ground. It often gets directed towards high objects, such as trees, buildings and even people. Being hit by lightning or it striking near you, especially in water, can cause serious injury and even death.
‘Ball lightning’ is the most bizarre form and is probably not actually lightning at all. This is the sighting of hovering balls of light immediately following a lightning bolt. Recent evidence suggest that most sightings of ball lightning are in fact hallucinations caused by changes in the magnetic field.
This does not explain the people who have been hurt or killed by balls of apparent lightning during a thunderstorm. The explanation for these is probably balls of natural gas, lit by the normal activity of the thunderstorm. There are other theories accounting for ball lightning, ranging from the down to earth (vaporised silicon) to the very strange (miniature black holes) but so far hallucinations for some and gas balls for the rest seem the most likely.
Not all lightning arises during thunderstorms. The electrical activity surrounding volcanic activity can be just as dramatic. The ash coming from a volcano is electrically charged and this can react with water droplets or ice to produce spectacular lightning shows in much the same way as in thunderstorms.
Whether it comes from volcanoes or thunderstorms, lightning is one of the most dramatic natural phenomena. We might no longer think it the action of an angry god but there are few people who are not awed, or even scared, by the sight and sound of a thunderstorm.
Further reading:
http://www.newscientist.com/article/dn18918-mysterious-ball-lightning-may-be-a-hallucination.html
http://news.nationalgeographic.com/news/2010/02/100203-volcanoes-lightning/
http://www.bbc.co.uk/weather/features/understanding/lightning_strike.shtml