>>2974659My interpretation (based on the anime and not the game) is that she was a sort of virtual being created by tachibana industries to fix the wired by getting rid of Masami and protocol 7. Lain's dad is shown to be an engineer working alongside Masami back when he was human.
But see, you can take this a whole layer deeper and believe that Lain's dad is a physical form of God himself, who made lain as his successor to rule both the wired and reality.
This is one of the best parts about the show, everything can be interpreted in different layers.
