Illumination is the art of creating decorative text and illustrations. Nowadays, this is most often on paper, but in medieval times parchment (vellum) was the preferred material. Parchment is essentially a rawhide product, tanned with lime, and lasts at least 1500 years in good conditions.
Strictly speaking, illumination refers to the use of metallic leaf, normally gold, as decoration, as the reflections from highly polished gold literally illuminate the page. However, the term is now used for any hand-done illustration.
Pictures are called "miniatures," not because they are small (though this is generally true), but from the pigment minium (red lead) which was used extensively.
Decorative letters are probably even more important than pictures in illumination. They may be as simple as ordinary capitals written in red, blue, or gold, or as complex as page-sized letters containing pictures and surrounded by intricate flourishes. One very typical style is a capital letter 4 or so lines high, in red or blue with white tracery, set in a matrix of polished gold. The central spaces of the letter are filled with stylized ivy leaves, also almost always red and blue with white lines, also in the gold matrix.