Onam festival is celebrated on the full moon day in asterism Sravana in [August-September]. This asterism was sacred to Lord Vishnu. King Mahabali was a great devotee of Lord Vishnu. Hence, this day became sacred for the people of Kerala.
People of Kerala began to celebrate the festival on this asterism as Sravanotsavam or Sravanmahotsav.
Scholars believe that the other name Thiru Onam comes from Sravanotsavam itself. ‘Sra’ was dropped and ‘vana’ was modified to ‘onam’. Since the asterism Sravana was sacred to Lord Vishnu, ‘Thiru’ [equivalent of Sri] was added. Thus, it became ‘Thiru Onam’ or ‘Thiruvonam’.
Onam day is regarded auspicious. People believe that on this day, the spirit of King Mahabali comes to visit his people. King Mahabali or Maveli was the most benevolent King of Kerala. This day also has mythological significance. People believe that on this particular day, Lord Vishnu transformed to avatar of Vamana. Then, Lord Vishnu or Vamana sent King Maveli to the nether world [patalam].