Holi is named after Holika, the sister of Hiranyakashyap, the demon ruler. Hiranyakashyap had received a blessing from Lord Vishnu that guaranteed he would not be harmed by man or beast, day or night, inside or outdoors, above or below earth.
So Hiranyakashyap declared that only he should be worshipped, not God. His son, Prahlad, continued to adore Lord Vishnu. This angered his father. He urged Prahlad to leap from a mountain, but he was uninjured. Even when Hiranyakashyap forced Prahlad to leap into a well, he remained uninjured. Hiranyakashyap attempted to poison Prahlad. In Prahlad's lips, the poison dissolved into sweetness.
Then Hiranyakashya commanded wild elephants to crush Prahlad, yet he remained unharmed. Next, Prahlad was placed in a chamber with dangerous, furious snakes, yet nothing happened to him. Finally, Hollka forced Prahlad to sit on a fire with her. Her scarf prevented her from getting burnt. The scarf flew from her to Prahlad. So Holika burnt, but Prahlad was safe. Lord Vishnu came as a half-man, half-lion, and killed Hiranyakashyap at dusk on his porch steps. Every year, a Holika bonfire is lighted to commemorate good's victory over evil. Holi is celebrated on the day following the bonfire.