Lucid dreaming is active, conscious dreaming. Not just knowing you’re dreaming, but taking on an active role in your dream. Dreaming is a very important part of many Pagan spiritualities. Ancient lore is full of the messengers of God(s) visiting people in their dreams to give advice, commands and general knowledge. If dreaming wasn’t important to the people who first began to repeat these stories, there would be no story, or at least, the messenger wouldn’t come in a dream but would knock on the door.
Many believe that dreaming is an Astral state. Your soul leaves your body and experiences things in other places. Sometimes in other worlds, and sometimes in this world. The dream world is part of the Astral Plane and it is is not limited by linear time, so your spirit can experience things that happened years ago or that have not yet happened. Also, because your conscious mind is relaxed, all of your filters are down while you are dreaming, which makes it easier for spirit beings to contact and communicate with you.
You are asleep when you are dreaming, rather than a sort of semi-consciousness you might experience with other Astral States. This makes your dreams very difficult to control. The point of Lucid Dreaming, however, is not so much to control your dreams as to experience them fully.