The lecture, along with the laboratory and the seminar is one of the basic types of class in higher education. A lecture class is one in which the professor (or other instructor), explains a subject while the students listen and (hopefully) take notes.
The format of a lecture can vary within this basic premise. Most teachers don't have the ability and inclination to speak for an hour or more in complete silence, so at the very least, the teacher will ask for questions. The level of class participation can vary between simple explanations, and class discussions that become involved enough to seem more like a seminar. But in general, a seminar consists of a professor speaking, and an audience listening. What a lecture consists of also varies with the level of education, since lectures also occur in high schools, and in non-academic training.
If you have been in the habit of reading any college brochures for the past ten or so years, you will notice certain things. For one thing, you will probably notice the words innovative and hands-on being used. And you will probably notice pictures of students engaged in rapt discussion under a tree on the campus quad. You might also see pictures of students doing some type of real world activity, perhaps involving smiling, underprivileged youths or wild scenery. Colleges and universities like to advertise their innovative, hands-on activities like internships, community service and group projects. You probably won't see a picture of 100 hooded-eye students sitting docilely in a lecture hall at 8 AM, staring at a professor. Lectures just aren't very hip these days. Even the word "lecture" is a synonym for scolding and being reminded to obey rules.
As much as the lecture system can be a chore, and as much as it can leave students by the wayside, it is still sometimes needed. I think the most basic reason for this is that, while students may be in college to learn new and challenging ways to think, they can't really do this without some type of factual basis. As much as students may believe they are beautiful, unique snowflakes, putting them into a discussion where they don't have some content to discuss things can lead to needless repeating of radical ideas. In addition, some students do learn better through listening without having to participate. This may be especially true of young, beginning students who may appreciate the anonymity of a lecture hall. Also, some professors are just naturally outstanding at being entertaining, informative lectures. For these reasons, while the lecture may not be the coolest form of college class, and may have some detractors, it will probably be around for a while.