There is no separate development environment for LotRO plugins. Lua as implemented in LotRO is a subset of the Lua runtime and has to be executed by the LotRO client since the client provides the environment. To execute and debug a plugin you have to load it in the game client. This is why I use my debug.lua file to provide a means of interactively executing Lua commands and exploring the objects in the Apartment in which the plugin is running (the client can have several distinct Lua environments called Apartments and a plugin can only access objects in the Apartment in which it is loaded).
You should probably read the thread http://forums.lotro.com/showthread.p...gins-for-Noobs
since it covers everything you need to know to get started with Lua in LotRO.