Shiva Lingam is the most widely misunderstood concept in Hinduism.As per Manusmruti there are 16 different meanings for Lingam. Meaning suitable to the context has to be taken while explaing the concept.
Limah Gamayiteeti Linga (That which originates from the condition of absorption is Lingam)
Lim Gamayiteeti Linga (That which reaches the condition of absorption is Lingam)
Lim means absorbed condition of knowledge or consciousness. Matter orginates from consciousness and finally gets absorbed back into consciousness.The nature comes into existence ,exists and is later absorbed.This process is repeated in a cyclic manner in nature. Since from the Leena (absorbed) condition it is going forward (Gamikkuka) so the name Lingam. Linga sound indicates the principle ,which is the cause of creation,sustenance and absorption. All the meaning of Linga sound are related to the condition of absorption.For example tree comes into existence from absorption and finally once decayed the tree will merge(absorbed) in nature.The nature originates from Shiva and later gets absorbed in it .The blending of absorbed Shiva and Sakti is Shiva Lingam where Shakti is prakriti and Siva is the principle beyond consciousness.
Shiva Lingam Concept taken from the speech of Jagadguru Swami Sathyananda Saraswathi Tiruvadikal. Listen to the concept in Swamiji's own words below. http://youtu.be/Y_3BN408Mow