The light shines in the darkness, but the darkness has not understood it.
What is this darkness? Was not the creation the work of God's hand? How can it be anything other than good? Because of the Fall. Darkness here represents the evil in the world because of Adam's disobedience. The Fall caused the world to be cursed. Every bit of selfishness, greed, hate, spite and wickedness stems from the Fall. That is the darkness that the light shines on. Light not only reveals what is in the dark corners, it banishes darkness and this is light so bright that there are no shadows remaining.
The word translated understood is a difficult translation. Other versions have 'comprehend', 'apprehend', 'appropriate', 'overcome', 'put it out', 'extinguish', 'perceive', 'stop' or 'absorb',. The root of the word means 'to grasp hold of'. We are told by the experts that this is also a figure of speech called litotes, which means to undersell for effect. The best known example in British English would be "It ain't 'alf 'ot, mum." the plaintive cry of the British soldier in India or North Africa, meaning it is very hot indeed.
My own best shot at the meaning would be 'doesn't get anywhere near getting hold of it' which carries the double meaning of understanding and defeating. The light is victorious, nay, triumphantly victorious! Overwhelmingly victorious!