There are many legends related to the festival of Diwali in India. However in Goa the Narkasur legend of Diwali is well known and is the reason for the Diwali celebrations. Diwali in Goa is marked by Narkachaturdashi, in which huge effigies of the demon Narkasur are built and then burnt.
According to the legend of Narkasur it is known that in the ancient times, the beautiful land of Goi or Gomantak was ruled by the demon king Narkasur. Narkasura had obtained a lot of powers which made him quite arrogant and he began to spread terror, cause destruction and torture people wherever he went. He also used to kidnap young beautiful girls and this caused great unhappiness among the people of the world.
The people of Goa thus prayed and the gods asked Lord Krishna for help. A great battle was fought between Narkasur and Lord Krishna in which Lord Krishna shot his famous Sudharshan Chakra, cut off the evil head of the Narkasur and slit his tongue. Thus the evil demon who ruled Goa met his end in the wee hours of the morning and Lord Krishna smeared demon's blood on his forehead as a symbol of victory.
To wash away the blood of Narkasur, Lord Krishna was bathed and massaged with scented oils and thus the custom of early morning bathing with oil is being carried out. Also the young girls held captive by Narkasur were released and they lit lamps in their houses to mark the end of darkness and the beginning of light in Goa. This is also a reminder that good can defeat evil.
In Goa the people make huge effigies which are filled with grass, waste paper and crackers. A lot of money is sometimes spent on making these effigies as some institutions conduct Narkasura competitions and give away cash prizes for the best made one. The effigy of Narkasur is then taken in a procession and later burnt at dawn amidst a lot of firework display to begin the festival of Diwali.