There are many correct answers to this question, for there are many ways that Diwali is celebrated. For one, Diwali is a festival of lights, in honor of Rama Chandra. He is honored due to his safe return from exile. This return came after he fought demons and conquered them.
It is said that Chandra was gone for fourteen years for the cause of fighting demons. Another reason that Diwali is celebrated is in honor of the goddess Lashkimi, who is the goddess of wealth. The festival is also used as a day to celebrate when Lord Krishna killed Narakaasur, which was a demon king.
Diwali is known to be one of India’s biggest festivals called “The Festival of Lights.” This is usually celebrated during Kartikamasam. There are differences when this will be celebrated. There are times when it may occur during October but there are also instances when this may happen in November.
The reason why this is celebrated is it signifies the return of Lord Rama. Lord Rama is said to have gone in exile for about 14 years. Lord Rama has emerged victorious over Demon Ravana. People usually celebrate by lighting different fireworks. This happens in India usually but this is also celebrated by people from different parts of the world.
Diwali, which is observed in honor of Rama Chandra, is celebrated due to a belief that he returned safely from exile after he had fought the demons and conquered. Rama Chandra, who was considered the seventh avatar, was said to have gone away for fourteen years fighting the demons, and he even conquered "Ravana," the demon king. The Hindus celebrate Diwali for several other reasons.
Another reason given by which Diwali is to be celebrated is that the goddess of wealth, goddess Lashkimi, was closely associated with Diwali. Another reason is that lord Vishnu rescued Rama from the prison of King Bali on that very Diwali day. In addition, the Diwali day is also marked as a victory festival to celebrate the killing of the demon king Narakaasur by Lord Krishna. Also, the day marked the Kartik moon day when MA Sita, Lakshman, and lord Ram returned to Ayodhya after defeating Lanka and conquering Ravana, the demon king.