What lights you use and how you use them depends on the sort of project you have in mind.
Are you looking to construct a diorama for a permanent display? Are you constructing a set for photography?
Are you looking at using LED lights as accent lights for effects, or for full elimination of the setting?
Are you looking for full bright even lighting, or for shadowy mood lighting with color accents?
What setting are you thinking of using the lights in? A normal room, like a kitchen or living room? Something bizarre like a laboratory or a cave?
Are you looking to install permanent lighting, or something temporary that you can use for multiple projects?
I believe that BAMComix and Rogue-Trooper use LED strip lighting powered by mains as the primary lighting source for their dioramas.
I use battery-operated mini LED lights as accent lights. I use inexpensive battery-operated holiday string lights (or sometimes mains-powered Christmas tree lights) that I pick up around Christmas time and either build them in to my settings, like here:
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Or I just string them up across the walls and ceiling as a visible part of the decor:
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Or integrate colored holiday lights in to the structure of a diorama as you build it. In this case, I wanted a blueish light to suggest electrical arcs inside a dynamo. I used some blue lights and some white lights behind blue tinted glass and plastic:
For this one, I used white LED string lights inserted in the nooks and crannies of plastic dollhouse furniture to create a back-bar:
I've tried using battery-operated colored LED wire as accent lighting a few times, but the inexpensive LED wire I purchased is not very bright, so the scene as a whole needs to be pretty dark for the LED wire to even show up:
The red light behind the figure is from a small battery-operated LED bicycle light.
For each of my projects, the LED lights are supplementary lighting, not primary lighting. My primary lighting for all of these scenes is one or two basic desk lamps angled so as to light the scene without creating too much glare. I set my camera exposure compensation to -1-1/3 f/stops to reduce the brightness of the scene as recorded.
For nearly all of my diorama photos, I use one or two LED desk lamps for primary lighting, with LED battery-operated holiday lights built in to the setting or hanging in the setting to provide background ambience.
I also use mini-LED battery-powered torches (flashlights) and bicycle lights or camping lights a lot. I turn them on and set them behind figures and objects in the scenes to provide backlight, rim light, or highlights among the shadows.
In this pic:
... the red light behind the mesh is my red bicycle light shining on a red piece of cloth. The figure is illuminated with a small hand-held torch (flashlight). I hold a folded clear plastic sandwich bag over the lens of the torch to diffuse the light and reduce the intensity. I'm holding the camera in one hand and a flashlight in the other, moving the light around to try to create atmospheric lighting on the figure without illuminating too much of the thrown-together janky background, while trying to hand-hold a 1/30 or slower exposure.
This may not be what you're asking, but that's the extent of my experience using mini LED lights in 1/6-scale projects.