Explain in your own words what a floated list item is?

When you float an element, it still has it's parent element. Floating simply takes the element out of it's normal document flow, similar to absolute positioning. The main difference is, other elements respect the position of a floated element, and wrap around it.

Now, if you float a set of list items, they likely align left to right or right to left; but inside their parent <ul>, So basically you're just moving how your elements are positioned within there container box. Think of it as a pair of cubes in a rectangular box. Originally the rectangle is stood vertically, to stack the cubes up one by one. Once the cubes are floated, the box is now laid horizontally to lay the cubes side by side. Or you can think of the box as just falling down from vertical to horizontal. The box doesn't change. It simply takes the space it took up vertically (say 100px) and changes to take up space horizontally. So what was originally a 100x10 box is now a 10x100 box.

With all that said where the cubes (list items) end up in space is determined by where the box is taken (ul).