A held light carried into the dark. A lantern shows only a small circle and makes moving possible.
Old French lanterne, from Latin lanterna (lamp, lantern), borrowed from Greek λαμπτήρ (lamptēr, torch, light-holder), from λάμπειν (lampein, to shine). The Latin form shows the borrowing plainly in its -terna ending. A lantern is specifically a light MADE PORTABLE and shielded — the housing is the invention, not the flame.
The light you carry into a dark room, and the realm named for it. The shielding matters as much as the shining: a lantern lets you bring light somewhere without it being blown out or setting anything alight.