It is one of the grandest traditional festivals in China. It is very important. It was named the Lantern Festival because it was held at the night of the 15th of the first month of the lunar calendar year. The Lantern Festival was also called "Deng Jie" and "Deng Xi", because the main activity of the festival is to light the lanterns. The Lantern Festival is also called "Shang Yuan" and "Shang Yuan Festival", these names come from the Taoism.

There are many kinds of parlance about the history of the Lantern Festival. But generally speaking, it began in the Han Dynasty. According to the history, the royal family of Han Dynasty in the Han Wudi Emperor age must offer sacrifices to the God "Tai Yi". It was said that the God "Tai Yi" was a very eminent god at that time, its position was higher than the Five Emperors. It also gave its favor to the emperor of Han Dynasty. So it was offered the grandest sacrifices. According to the legend, another emperor called Han Wendi was also related to the Lantern Festival. The Emperor Han Wendi suppressed a riot threatening his throne position on the 15th of the first month of the lunar calendar year, so he went out of his palace to enjoy himself with the people at the night of this day each year, and he named this day the Lantern Festival. However, these two kinds of custom are related to the activities, that is, to offer sacrifices to the God "Tai Yi" and to go out for tour. There are no records about the custom of lighting the lanterns and firing the fireworks. The last two activities are related to the Emperor Han Mingdi of the Eastern Han Dynasty. He ordered to light the lanterns at this night. So the custom of lighting the lanterns and watching the lanterns formed later.