LVM HOWTO
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Chapter 3. Anatomy of LVM

Table of Contents
3.1. volume group (VG)
3.2. physical volume (PV)
3.3. logical volume (LV)
3.4. physical extent (PE)
3.5. logical extent (LE)
3.6. Tying it all together
3.7. mapping modes (linear/striped)
3.8. Snapshots

This diagram gives a overview of the main elements in an LVM system: 

+-- Volume Group --------------------------------+
|                                                |
|    +----------------------------------------+	 |
| PV | PE |  PE | PE | PE | PE | PE | PE | PE |	 |
|    +----------------------------------------+	 |
|      .       	  .    	     . 	      .	       	 |
|      .          .    	     .        .	         |
|    +----------------------------------------+	 |
| LV | LE |  LE | LE | LE | LE | LE | LE | LE |	 |
|    +----------------------------------------+	 |
|            .          .        .     	   .     |
|            . 	        .        .     	   .     |
|    +----------------------------------------+	 |
| PV | PE |  PE | PE | PE | PE | PE | PE | PE |	 |
|    +----------------------------------------+	 |
|                                                |
+------------------------------------------------+

Another way to look at is this (courtesy of Erik B�gfors on the linux-lvm mailing list): 

    hda1   hdc1      (PV:s on partitions or whole disks)                        
       \   /                                                                    
        \ /                                                                     
       diskvg        (VG)                                                       
       /  |  \                                                                  
      /   |   \                                                                 
  usrlv rootlv varlv (LV:s)
    |      |     |                                                              
 ext2  reiserfs  xfs (filesystems)

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Benefits of Logical Volume Management on a Large System volume group (VG)