The difference between literature review and background sections of a dissertation
Context: I'm in a US PhD program and thus my answer may not be fully appropriate for Masters in UK.

In the US, a Masters thesis is required rather than dissertation, which is required only in PhD programs.  In Social Sciences, a Masters thesis shows that you understand the relevant research in some depth and that you can also apply this research to some specific problems or questions.  In contrast, a PhD dissertation needs to contribute to research in some important way (even if the contribution is narrow or small).



There are no widely accepted rules for what is appropriate for Background or Literature Review chapters, or whether your thesis should include either or both.

What follows are my views, based on reading various theses and dissertations.

A Background chapter is best used to present contextual or prerequisite information that is important or essential to understand the main body of your thesis.  Perhaps there were some historical developments that set the stage for your research questions or thesis.  Perhaps there was some debate over key terms or scope of your subfield.  Perhaps you are bringing together several disciplines, and you need to explain which aspects of each discipline you are including and not including.

A Literature Review chapter builds a conceptual structure that ties together all the key ideas from all the relevant literature.  By "conceptual structure" I mean an organized way of linking individual ideas together so that their relative importance and interrelations are clear and obvious to the reader.  What are the main ideas?  What ideas support these main ideas? What are the contradictory ideas?  On what basis to people decide what ideas or positions to support or oppose?

Viewed this way, what becomes clear is that a Literature Review chapter is less about "literature" and instead is mostly about "review".



For what it's worth, in my dissertation I will not have either chapter. Instead, I've decided to have a chapter called "Foundations" to cover both of these needs.