Visible Light Communication (VLC) has gained great interest in the last decade due to the rapid developments in Light Emitting Diodes (LEDs) fabrication. Efficiency, durability and long life span of LEDs make them a promising residential lighting equipment as well as an alternative cheap and fast data transfer equipment. Appliance of visual light in data communication by means of LEDs has been densely searched in academia. In this paper, we explore the fundamentals and challenges of indoor VLC systems. Basics of optical transmission such as transmitter, receiver, and links are investigated. Moreover, characteristics of channel models in indoor VLC systems are identified and theoretical details about channel modelling are presented in detail.