This question came up amongst my group in regards to the Lizard Men spell Chotec's Wrath:
Chotecís Wrath: A lightning bolt shoots from the
sky above and strikes the closest enemy model within 10" of the Skink
Priest, causing a single Strength 5 hit. However, add +1 to the Strength and
+1 to the roll on the injury table if the model is wearing armor like light
armor, heavy armor, Ithilmar armor or Gromril armor. Difficulty 8
You could interpret the designer's intent one of two ways:
1. The Old Ones are directing lightning at the skink priest's enemies. The skink priest does not need to see his target, merely calling upon his gods to do the work for him.
2. The phrase "closest enemy model" is meant to limit the caster's choice of targets. Note that this is similar to the "must fire at closest enemy" ballistics rule, implying that line of sight is necessary.
I tend to think that option 2. more closely mimics the designer's intent. It seems a bit broken (not to mention un-fluffy) for a priest to stand on the other side of a castle wall and blast away with lightning from the sky at an enemy indoors that he can't see. So what then, the skink swims around in a castle moat muttering prayers while a small rain cloud gathers in the castle's great hall and starts shooting dudes?