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The documentation is currently quite sparce. Sorry about that
WP-Librarian is a library inventory management system. It keeps track of an inventory of books/CDs/DVDs, patrons of the library, and the interactions between the library patrons and the library's inventory. By incorporating this functionality into WordPress it allows small organisations such as book clubs or university societies, who may already have a WordPress installation, to both showcase their library on their site and effectively manage who has what.
A Word of caution
Owing to both the purpose of WordPress and the nature of this plugin I would not advice using this plugin for large libraries with thousands of patrons. Just as no large e-commerce site should use a WordPress installation with an e-commerce plugin, nor should a large library use a WordPress installation with this plugin. There are plenty of great library/inventory management solutions out there for your needs, don't be lazy.
How it works
At its heart WP-Librarian runs off four WordPress Post Types with some logic to glue them together. Items (books) can be loaned to Members (librarian patrons) creating Loans which incur Fines if returned late. There's plenty of post meta and some taxonomies involved to flesh things out but at its heart WP-Librarian consists of those four post types and their interactions.