A five-day festival, Diwali (also known as Deepavali in southern India) is one of the biggest and most joyful festivals of the Hindu and Sikh years, taking place in October or November, depending on the lunar cycle. It shares with Christmas a tradition of candle lighting and gift giving, but of course celebrates something quite different.
The overwhelming significance of Diwali, or the Festival of Lights, comes from its name, which signifies the triumph of light over darkness, and thus of good over evil. This is celebrated particularly on the third day of the festival, which coincides with the complete waning of the moon (which creates a dark sky). Oil lamps (diyas) and candles are lit, and the Lakshmi Puja ceremony calls on the goddess of wealth to bless the house.
The festival also marks other significant events, according to the area that people come from. Some believe, for example, that it recognizes Lord Rama's return from a war in which he killed the demon Ravana. Others believe that it recognizes the death of another demon, named Narajasura. at the hands of Lord Krishna's wife. Others associate it with the god Vishnu's banishment of king Bali to the underworld.
In general, however, along with good over evil, Diwali is a time of rebirth, which is why you’ll find many participants wearing a new set of clothes to symbolize the new beginning (which in some areas actually coincides with the beginning of a new year). Many people exchange gifts during Diwali, particularly sweets, and it’s very common to hear firecrackers exploding in celebration. Diwali is also a time of worship and reflection on one’s inner light, and is overwhelmingly a time for family and loved ones.