Lua is a lightweight scripting language that can be embedded into C/C++ applications. It is commonly used for extending applications with scripting capabilities. Some key uses of Lua include game scripting, configuration files, extending applications, and implementing logic or rules engines. Lua provides APIs for interacting with the Lua virtual machine from C/C++ code, including pushing and popping values on the Lua stack, calling Lua functions from C, and calling C functions from Lua scripts.