At least in
American households, the room where
group activities are most likely to take place and where the
family hangs out. An area that doesn't "belong" to any particular people as
bedrooms do, or any one purpose like a
kitchen or
dining room. Usually near the front entrance of the home/apartment.
The living room is the successor to the 19th century parlor, where originally the family entertained fairly close friends, and sitting room, a more informal place where the family spent time. Parlors were the major showplaces of houses and gradually became formal places used for special occasions rather than everyday visits.
"Reader's Digest suggested that we rename our parlors, which were used to display the dead before burial, to give it a new purpose -- for the living." (www.scripting.com, 23 Aug 2001) I don't know if it was just Reader's Digest that sparked the change, as it seems the parlor replaced the drawing room, and in some places the den, family room, or rumpus room has replaced the mere living room in the house that has space for multiple places where gathering could happen. When it can happen, people seem to like having a "nice" room for special occasions (sometimes in the modern U.S. this is the dining room) and an informal place for every day.
Sources:
http://www.scripting.com
http://abcnews.go.com/onair/Insite/insite990312_downs.html
http://www.ukans.edu/~medieval/kansas-l/1998/msg00169.html
http://barbjscott.freeservers.com/Scott/ASJLetters.htm