Lysergic acid diethylamide was created in 1938 by scientists looking for new medical drugs, Albert Hoffman first discovered it's "psychedelic" properties by accidentally ingesting it; he reported that it induced a dream like state and saw intense colors and shapes.
It became popular in the 60's, at the same time as The Civil Rights Movement, people were challenging the way things were and seeking liberation, LSD only added to this. With LSD, scholars who tested it claimed all rules fell away.
The psychedelic shaped the era's art, music, and fashion. It made tie-dye popular, and inspired bands like the Grateful Dead and The Beatles.
Biological
LSD decreases communication between The Default Mode Network, that controls consciousness and filters the sensory information that enters our sphere of awareness. These parts of the brain create maintenance of self and the ego, along with it's processing of meaning.
Because the DMN ceases communication, other parts of the brain start communicating that are usually separated, so more areas of the brain contribute to visual processing. This is what creates the dream like state and intense visuals.
Psychological
LSD causes distortion of a persons ability to recognize reality, think rationally, or communicate with others. It causes you to see images, hear sounds, and feel realistic sensations that are not real. It can last up to twelve hours.
During use, you usually experience either a 'good trip' or a 'bad trip'. During a good trip, the sensations are highly pleasant, and some people report to have a mystical or religious experience, or a feeling of oneness and unity. During a bad trip, the hallucinations are frightening and it causes you to feel panicked, or that you do not exist or are dead.
The short term effects include dizziness and sleeplessness, loss of appetite, sweating, weakness, tremors, impulsive or rapid emotional shifts, and sensory effects (colors are brighter, sounds are sharper, and time seems to go by slower.)
Long term user's tolerance gets higher quickly, and they can develop Hallucinogen Persisting Perception Disorder (hallucinations, seeing halos on objects), this is also known as an "acid flashback."