Holi has a three dimensional significance as it celebrates the full moon of the month of Phalgun, the last month of the Hindu calendar which marks Holi and above all it is a colourful festival.
Firstly, because of the romance of nature, which blossoms in the form of flowers and fruit on every tree, Holi is a festival of flowers and colours and is associated with the divine lover Krishna playing with colours - coloured water and gulal or coloured powder -- with the gopis or girls of Brindavan.
Holika Dahan: As a harvest festival, Holi is celebrated on the full moon night with a community bonfire, around which people gather to give Agni (fire), the messenger of the gods, new food grains and sweetmeats as their seasonal offerings. Bonfires date back to the days of Hiranyakashyap, when he ordered his son Prahlad (the great bhakt of Lord Narayan) to be burnt alive, because Hiranyakashyap was an Asur and hated Lord Narayan. He asks sister Holika, to wear the set of clothes she possessed which could not catch fire.
( Read our Kids Mythology Section For King Hiranyakashyap and Prahlad)
Coconuts, bananas, sheaves of new corn, fruit and root vegetables, fresh from the farms, are thrown into the fire during the fun and frolic of dancing around the bonfire.
Dulendi: The next day is the real day of Holi.From the
morning onwards, people gather and play Holi. They visit each other's houses, carrying
colour and water, drenching each other as they visit different places. Some get on to
two-wheelers, cars and trucks and visit people living far away; others choose to play with
their neighbours.
Holi is played with pichkaris(a brass syringe which squirts water in a spray or even in a straight line) and Gulal. Gulal is made up of numerous colours such as pink, magenta, red, yellow and greens.
Coloured water, made by soaking kesariya flowers in water, is sprayed upon all merrymakers with miniature pichkaris made from bamboo or metal. As an annual reminder of this celestial dance of joy, people go from house to house smearing gulal on the faces of their friends.
Young and old alike are drenched with
colors. On Holi, people are suddenly caught unawares with colors being poured from the
terraces and roofs of houses, bursting balloons, or long pistons squirting colored water. 
People in small groups are seen singing, dancing and throwing colors
on each other.
The color, noise and entertainment that accompanies the celebration of Holi bears witness to a feeling of oneness and sense of brother-hood. No other festival brings home the lesson of spiritual and social harmony as well as the festival of Holi!
In the old days, Holi was a much more leisurely festival, celebrated by whole communities who stopped work for days to dance and feast. Rang bhar se, chunariya bhige was the erotic theme of the day. Raas and other folk dances in the North and a variety of colourful folk dances in the South mark the festival. A number of people made and drank bhang to the point of intoxication and some of the revelry resulted in misdeeds and destructive activities.