According to Hindu mythology, Lord Vishnu in his 8th incarnation as Krishna destroyed the demon Narkasura. The demon Narakaasura was the evil king of Pragjyotishapura, near present-day Assam. Power made the demon king arrogant and he became dangerous to his subjects and even to the gods. He ruled with a reign of terror, abducted 16,000 daughters of the gods, and stole the earrings of Aditi, mother of the gods.
The Narakasur Legend of Diwali goes like this.Narkasura was
believed to be a demon of filth, covered in dirt. He was giant who
was often good but at times, behaved very badly. He used to kidnap
beautiful young women and force them to live with him.
The gods asked Lord Krishna for help, and after a mighty battle he
killed the demon, freed the girls and recovered the earrings First,
Krishna had to fight with a five-headed monster that guarded the
demon's home. The rescue of the 16,000 girls is said to be the
origin of the story that Krishna had 16,000 wives, Krishna granted
Narakasur one last request, because of the good deeds he had done.
Narkasura hoped that his death might bring joy to others. So, before
being killed, he cried, " Let this day be celebrated as a day
of feasting in the World!" Krishna granted his request and the
women were freed.
After his victory Krishna returned very early in the morning and
was bathed and massaged with scented oils. Taking an early morning
bath with oil is still a Deepavali tradition.For Hindus, this Diwali
story is a reminder that good can defeat evil.
But this Diwali legend is known only in the Western and Southern
India, it is not known in the north and east. In Western and
Southern India Hindus smash a bitter fruit (called Kaarita) with
their big toe on Naraka-chaturdashi day. This is done after
having a ceremonial bath in which sandalwood paste and sweet
smelling essences are used to re-enact the slaying of the demon
Narakasura by Lord Sri Krishna. This Narakachaturdashi day therefore
is dedicated to lights and prayers heralding a future full of joy
According to Hindu mythology Diwali festival is celebrated to honour Lord Krishna's slaying of Narakasur.