Diwali is the one hindu festival that unites India. It's significance in India can be compared to Christmas in USA and Europe. It is also referred to as the festival of lights, because of the small clay lamps (diyas) that people burn during Diwali. The name Diwali (or Deepwali) means 'rows of lamps'.
The hindu calendar has long since been replaced by the gregorian calendar for secular purposes, but is still used for fixing the timings of the hindu festivals. Diwali marks the beginning of the hindu new year. Its gregorian date will wander, much like Easter, but normally come ins October or November. The festival commemorates the return of Lord Rama from exile back to his kingdom. The delighted citizens of Ayodhya are supposed to have lit thousands of lamps to guide his return to their city.
Diwali is a family festival. Housewives scrub their houses clean and make many types of sweets to offer guests. Shopping has to be done -- most people will buy new clothes for Diwali. The streets are lit up with endless strings of lights. Schools and offices close and families gather together to celebrate. Families will gather for prayers and worship, as well as more secular activities. Diwali is the time for both silent meditation and noisy firecrackers and firework displays.