The "readme file" is the lua file, I just put all the descriptions of the functions at the top (notice each line starts with a lua comment.) Just right click and select "Save as..." or "Save target as..." and put the file in the same directory as your lua program, and then put dofile("functions.inc.lua") in the lua file that uses those functions.

Edit: I actually recommend copying and pasting the functions you want to use into your lua file, instead of including the whole functions.inc.lua. But it's your choice.