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The lantern ward will help you light up the darkness on the islands, which is really useful during night time and in the Lights Out! mode.
It also removes the fog of war in a radius around it which is really useful to predict the arrival of Corruptrons or enemy players.
Lanterns need to be built on the Workbench.
(In contrast: all other wards - sentinel, healing, capture and pylon - are built on the Altar.)
Lantern Wards can then be placed both on the ground or on the side of a vertical surface such as a wall or a cliff-side.
Lanterns do not need to be connected to Pylons to work, but they will shine brighter if they are connected.