Lanterns have been part of Chinese culture for centuries, there were mainly three kinds of lanterns:
Palace lantern (宫灯) They were mainly used in palaces in ancient times. When making palace lanterns, fine wood was used. The palace lanterns were covered with silk or glass. These lanterns were not only used as lights but also as decorations (装饰) in palaces.
Gauze lantern (纱灯) Red gauze was used when making gauze lanterns. In Chinese culture, red lanterns are symbols of happiness and good wishes. So red lanterns are always hung on important festivals such as Lantern Festival, Spring Festival and National Day. In some famous Chinatowns abroad, you can see red lanterns all the year round. They have become a symbol of Chinese culture worldwide.
Shadow—picture lantern(走马灯)The shape of shadow—picture lantern was much like that of the palace lantern. There were two layers(层)of covers. Pictures were drawn on the inside layer and appeared on the outside cover when they were moving.
Nowadays, more modern technology is used to make lanterns. The shapes of the modern lanterns have changed a lot, too.