means A person posted to watch for danger and warn the others, or the elevated spot from which such watching is done.

from A plain English compound: 'look' (Old English 'locian,' to use the eyes) bolted onto 'out.' English loves these phrasal verbs hardening into nouns — like 'breakdown' or 'standby.' 'Look out' was first the warning shout, then the act of watching, then the watcher, then the high place where the watching happened. The phrase 'on the lookout' carries that nautical flavor, where a sailor perched aloft scanned the horizon for rocks, sails, or trouble before it arrived.