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The term Various Artists is used in the record industry when numerous singers and musicians collaborate on a song or collection of songs. Most often on Last.fm, compilation album tracks appear under the name of Various Artists erroneously because the individual artist is not listed in the album's ID3 information.
Compilation albums, for example.

Sometimes, single releases may be credited to Various Artists when their profits are going to charity and, usually in high-profile cases, are sometimes known by a group name. Examples include Band Aid with their releases of Do They Know It's Christmas? and USA for Africa with We Are The World.

Various Artists is also an actual performance name for Torsten Pröfrock, who runs the German DIN label. Torsten performs also as Dynamo, Erosion, Resilent, Traktor besides some others. He's a good friend of Robert Henke and since the Fall of 2004, he is a member of Monolake.

Various Artists was also a short-lived Bristol punk band formed by brothers Jonjo and Robin Key (originally from Birmingham). Other members were also simultaneously in Art Objects who went on to become The Blue Aeroplanes, the latter the Key brothers also co-wrote some songs and were involved in. When Various Artists imploded, the Key brothers went on to form Either / Or.

Various Artists also appear on tracks from musical theater soundtracks, due to the nature of having many cast members on one song, as well as an ensemble in some cases.
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Artist biography from last.fm