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A review of basic physical phenomena underlying the light-induced molecular reorientation in nematic liquid crystals is presented. A detailed description of the mechanisms of direct optical torque, photoisomerization and photorefractivity and of their effect on the macroscopic order of liquid crystals is reported. The first part of the article deals with the study of reorientation effects in transparent liquid crystalline materials. Here, the effects of photo-induced molecular reorientation are fully interpreted within the framework of classical electrodynamics and standard continuum theory of liquid crystals. We investigate the peculiar properties related to the macroscopic anisotropy and the collective behaviour of liquid crystals that result in extraordinarily large nonlinear optical response. Afterwards, the behaviour of liquid crystals in the presence of light absorption is considered and the related reorientation effects are discussed. We give a review of the wide phenomenology which is met in liquid crystals when doped with absorbing azo-dye molecules. The photoisomerization process that in this case drives the evolution of the dye-liquid crystal mixture consequent to the interaction with the light is discussed in detail. Finally, the relatively new field of photorefractivity in liquid crystals as a source of molecular reorientation is considered. We describe the different mechanisms contributing to the creation of a space-charge field such as conductivity anisotropy, dielectric anisotropy and photocharge production. A theoretical discussion of the fundamental mechanisms regulating the dc-field-assisted optically induced space-charge fields and the optical molecular reorientation in nematic liquid crystal films is also given.