Festival of Lights, Diwali: History & Origin

There are many interesting (mostly religious) stories behind the history and origin of Diwali, the Festival of Lights, and these are the well-known ones:

The return of Lord Rama to Ayodhya
Lord Rama -- the son of Dashratha (the King of Ayodhya) -- was banished by his father from the kingdom along with his wife Sita and his younger brother Lakshman for a period of 14 years. Being an obedient son Lord Rama left Ayodhya and went to the jungles. During this period of exile, he defeated and killed the Ravana -- the demon king of Lanka who had kidnapped Sita. After this great victory of good (symbolized by Ram) over evil (symbolized by Ravana), Rama triumphantly returned to Ayodhya. He was welcomed by the people of the kingdom who expressed their happiness and love for the lord by lighting rows of clay lamps and by distributing sweets. It is said that the Festival of Lights, Diwali, owes it origin to this event. Since that day it is celebrated with much joy and religious fervor across the world.
The subjugation of King Bali by Vamana Avatar
The other story involves King Bali. He was a charitable ruler. However, he was also highly motivated and was drunk with power. Some of the Gods requested Lord Vishnu to put an end to Bali’s fast growing ambitions. Vishnu visited earth in the form of a Vamana (dwarf). He was dressed as priest. Vishnu knew well that Bali was generous and loved giving alms. So he approached Bali with a fixed plan, and asked him to give him the space covered by him with his three strides. An unsuspecting Bali readily agreed thinking that the dwarf would not cover much ground. But as soon as he agreed, Lord Vishnu appeared in his true form, and with just three gigantic strides, covered the entire Earth, the Skies and the Universe. Bali was humbled and sent to the underworld. Since that day, as a part of Diwali celebrations, King Bali is remembered on this day.