There was a mighty demon king named Hirnakashyipu who
had won all the three worlds of heaven, earth and hell and had thus,
become very proud. He assumed that he could defeat even Lord Vishnu with
his valor. He went to the extent that he had enforced a law that
everybody would worship him instead of gods and deities. However, his
little son Prahlad refused to accept his commands and continued to
worship Lord Vishnu with complete devotion. Infuriated by this defiance
of his son, he ordered his soldiers to throw him down a hill. Praying
fervently and having full faith in Lord Vishnu, Prahlad did not retract
from his word. True to his faith, Lord Vishnu rescued him at the last
moment.
Flustered by this news, Hirnakashyipu invoked the help of his sister
Holika, who had a boon that she could walk through the fire unharmed to
do away with his son. The wicked aunt agreed to the evil desires of his
brother and entered the fire with her nephew Prahlad. However, the
brother and sister had forgot that Holika could only enter the fire
alone or she would perish. Thus, blessed by Lord Vishnu, the child
Prahlad remained unharmed but Holika got burnt and died instantly. Holi
is thus celebrated to commemorate the death of the evil aunt, after whom
the festival is named, and the new life granted to Prahlad for his
devotion and faith. To this day, cow dung is hurled into the fire and
obscenities are shouted at the Holi fire at some places to insult
Holika.