It's likely derived from the place name Lügden (also spelled Lügde), which is a town in the Lippe district of North Rhine-Westphalia, Germany. The name "Lügden" itself is believed to come from the Old High German words "lûg" (meadow) and "den" (valley), meaning "meadow valley."
Therefore, people with the surname Luginbill likely originated from or have ancestry in the Lügden region of Germany.