A word used for situations in media- mostly in comics and television- where the concerns, criticisms and arguments of the audience are answered in the text itself to assuage any disbelief and therefore frustration a reader or viewer might possess. By underscoring points of possible contention, usually humorously, the suspension of disbelief is retained.
Often used to account for implausible developments, ridiculous motivations, bizarre twists and illogical situations, a lampshade can also cover obviously cribbed plot elements by having the author acknowledge through a character that "This is just like..."
A lampshade can be used to explain threads that may have lain dormant, and often prods at the fourth wall by having characters address the audience, or realities outside their own existence.
Also known as Spotlighting, sometimes as 'Cousin Larry Trick'. See TVTropes for more information.
GUARD #1: You're using coconuts!
GUARD #1: You've got two empty halves of coconut and you're bangin' 'em together.
-- Monthy Python and the Holy Grail, to lampshade the fact that production could not afford horses for a medieval movie.
"...If you're wondering how he eats and breathes, and other science facts; Just repeat to yourself it's just a show, you should really just relax..."
--From the theme song to Mystery Science Theater 3000, effectively ironing over the pesky scientific impossibilities.