There once was an Asura king named Mahabali, who ruled over the people of what is now Kerala. Mahabali was a generous and benevolent ruler, beloved by his people. He was, in fact, the descendant of Prahlad, whose devotion to Lord Vishnu saved his life.
But Mahabali’s success on Earth made the Gods jealous, and they conspired to defeat him. Ironically, Lord Vishnu was asked to help the Gods achieve their wish. So Vishnu came to Mahabali disguised as a poor Brahmin dwarf named Vamana. Since word was that Mahabali was a very generous king, Vamana asked him for a piece of land that measured three of his steps.
Mahabali agreed, but as soon as he did, Vamana began to grow. He continued to grow until he reached cosmic proportions – and then, he took his steps. His first step covered all the land, his second covered the sky. Seeing that Vamana had no place for his third step, Mahabali willingly offered his head.
When Vishnu stepped on Mahabali’s head, he was sent into the underworld, and the wish of the Gods was granted. However, since Mahabali was so beloved by his people, Vishnu granted him the ability to come back to the surface of the Earth once a year, to see his people.
This annual return of Mahabali is celebrated in Kerala as the festival of Onam.