LED stands for Light Emitting Diode.
It is based on the phenomenon of electroluminescence (Electroluminescence is the phenomenon in which material emit light in response of passage of electric current through it and under the influence of an external electric field).
Inside the LED chip, there is a p-n junction semiconductor (p-n junction semiconductor is made up of p-type semiconductor layer and n type semiconductor layer) chip. Betweem this p-n junction semiconductor there is active region.
In the active region, the holes of the p-type semiconductor and electron of n-type semiconductor combine and release energy in the form of photon. And the color of the emitted light is determine by the energy band gap of the semiconductor material.
Visual illustration of LED:
