Lantern Festival
In ancient China, new year celebrations started from New Year's Eve and reached a second climax during the Lantern Festival. Here is the story behind the Lantern Fetival: During the reign of Emperor Wu Di of the Han Dynasty, there was a palace maid named Yuanxiao. Yuanxiao was a clever and kind-hearted girl, but she was very sad and homesick as she was locked up in the palace all year round.
Luckily she found a friend in a minister called Dongfang Shuo. He told the emperor a clever story and helped Yuanxiao see her family again.
Shuo told the emperor the Supreme Deity of Heaven had ordered the God of Fire to set the city of Changan ablaze on the 16th day of the first month of the lunar year. Shuo said the only way to prevent this from happening was to let off firecrackers and hang up red lanterns all over the city. Shuo said everyone, even the palace maids, would have to participate in the lantern show.
Knowing that the God of Fire loved to watch a good fire show and that he also liked the dumplings made by Yuanxiao, Shuo suggested to the emperor he allow Yuanxiao to present her dumplings to the god. Shuo said the fire god would surely be appeased and therefore save the city of Changan.
The emperor bought the story and ordered the city of Changan to spend that entire night letting off firecrackers and playing with lanterns. Nothing amiss happened that night and Yuanxiao took advantage of her time outside the palace to have a family reunion.
Emperor Wu Di had such a good time that the next year he again ordered that red lanterns be hung all over the city on that same day and the little palace maid made her dumplings again too.
Thus the 15th day of the first lunar month of the year became a festival. The Lantern Festival is also called the Yuanxiao Festival, named after the famous dumplings. On this night, people celebrate under the first full moon of the year, which is symbolic of family reunions and a full happy life.
Source: http://www.insidechina.com/culture/festival/