Lugu Lake is an incredibly beautiful lake, nestled high in the Himalayan mountains (at about 3500 meters about sea level). The lake straddles Yunnan and Sichuan provinces, with the border between the two running right through the middle of the lake. A walking tour around the lake (a popular activity for backpackers) takes about three days, through some incredibly beautiful scenery, and gives you a chance to visit many local communities.
There are many villages scattered around the lake, with the best-known villages being Luoshui and Lige, which are the main tourist centers of the area. Many people, when they talk about the Mosuo, talk about Lugu Lake, as if this is the center of Mosuo culture. However, that is not really the case.
By far the majority of Mosuo do not live at the lake, but in towns/villages scattered throughout the mountains surrounding the lake. And Luoshui is really about as far from “typical Mosuo” as you can get; rather, it has become a fairly typical tourist trap, presenting an image tailored to tourist desires and sensibilities. While it is a truly beautiful place to visit, if you want to see/experience “real” Mosuo culture, you've got to get away from these tourist areas.
The real “center” of Mosuo culture, if one exists, would be Yongning. Commonly considered the Mosuo capital, it is home to the largest Mosuo Tibetan monastery, and is a center of Mosuo religion and culture.