Difference between SUM function and LOOKUP function

Hello,

I am struggling to figure out how to distinguish the usage between SUM function and LOOKUP function.

Could anyone explain the meaning of the "list-formatted" such as list-formatted line item/property in the context below? (quoted from this page) 

SUM or LOOKUP?
Determining whether to use SUM or LOOKUP depends on how the mapping table is set up between the Source List (where the original data resides) and the Target List (where the formula pulling the data resides).

A mapping table between the Source List and Target List can be set up in one of two places:

• in a module, using a list-formatted line item
• in a list, using a list-formatted property.

General rule
If your mapping table contains the Target List and maps to a Source list-formatted line item or list-formatted property, then use LOOKUP in your formula. Setting your mapping table up this way says that each Target item can map to one and only one Source list item in the mapping table, so we are looking up that Source item value.

If your mapping table contains the Source list and maps to a Target list-formatted line item or list-formatted property, then use SUM in your formula. Setting your mapping table up this way says that each Target item can map to many Source items, so we are summing up all Source data that is to land in each Target list item. This is similar to SUMIF in Excel.