This paper describes the fundamentals of phase-only liquid crystal on silicon (LCOS) technology, which have not been previously discussed in detail. This technology is widely utilized in high efficiency applications for real-time holography and diffractive optics. The paper begins with a brief introduction on the developmental trajectory of phase-only LCOS technology, followed by the correct selection of liquid crystal (LC) materials and corresponding electro-optic effects in such devices. Attention is focused on the essential requirements of the physical aspects of the LC layer as well as the indispensable parameters for the response time of the device. Furthermore, the basic functionalities embedded in the complementary metal oxide semiconductor (CMOS) silicon backplane for phase-only LCOS devices are illustrated, including two typical addressing schemes. Finally, the application of phase-only LCOS devices in real-time holography will be introduced in association with the use of cutting-edge computer-generated holograms.