Holika (Sanskrit: होलिका) was a demoness in Hindu Vedic scriptures, who was burnt to death with help of God Vishnu. She was the sister of King Hiranyakashipu and aunt of Prahlad.

Why Holika, a demoness, is worshipped on Holi? It is quite mysterious to worship Holika during Holi. Even no religious book has detailed explanation of worshipping Holika.Many scholars give their own explanation of word Holika and reason to worship her. Most of those interpretations zero down to burn evil even if it has power of doing good.

In the beginning Holika was protective as she was created to ward off all fears. She was symbol of power, wealth and prosperity and could bestow those to her worshippers. During a particular attempt on Prahlad's life, King Hiranyakashyapu called upon his sister Holika for help. Holika had a special cloak garment that prevented her from being harmed by fire. Hiranyakashyapu asked her to sit on a bonfire with Prahlad, by tricking the boy to sit on her lap and she herself took her seat in a blazing fire. The legend has it that Holika had to pay the price of her sinister desire by her life. Holika was not aware that the boon worked only when she entered the fire alone. Prahlad, who kept chanting the name of Lord Naarayana all this while, came out unharmed, as the lord blessed him for his extreme devotion.However she became harmful and fearsome when she tried to immolate devotee Prahalad. Hence Holika was burnt to ward off any further trouble.

Krishna and Radha 

This symbolic myth is common in some parts of India, where Holi is also called Phagwah and Holika is instead called Pootna or Putna. Kansa, king and uncle of Krishna, sensed danger to his life from his infant nephew when he grows up. Kansa sends the demon Putna disguised as a woman to poison the infant under the guise of breast feeding. Baby Krishna sucks not only the poisonous milk but her blood too - forcing her to re-appear in her true form of a demon. She runs, and bursts into flames. Putna dies, while baby Krishna transitions into his characteristic dark blue skin color. The day before Phagwah is celebrated by burning Putna. According to the myth, in his youth, Krishna despairs about fair skinned Radha and whether she or other Gopis (girls) will like him because of his skin color. His mother tired of the desperation, asks him to approach Radha and color her face in any color he wanted. This he does, and Krishna and Radha became a couple. The playful coloring of face of Radha has henceforth been celebrated as Holi.

Holika Dahan is burning of Holika is the one that we can most directly associate with Holi. Fire burnt on the eve of Holi (Holika Dahan) symbolizes the burning of Holika. The story as a whole is testament to the power of devotion (bhakta) over the evil represented by King Hiranyakashyapu, as Prahlad never lost his faith.

The burning of Holika is the most common mythological explanation for the celebration of Holi. In different parts of India varying reasons are given for Holika's death. Among those are: 

Vishnu stepped in and hence Holika burnt. 

Holika was given the power by Brahma on the understanding that it can never be used to bring harm to anyone, 

Holika was a good person and it was the clothes that she wore that gave her the power and knowing that what was happening was wrong, she gave them to Prahlad and hence died herself. 

Holika wore a shawl that would protect her from fire. So when she was asked to sit in the fire with Prahlad she put on the shawl and sat Prahlad down in her lap. When the fire was lit Prahlad began praying to Lord Vishnu. So Lord Vishnu summoned a gust of wind to blow the shawl off of Holika and on to Prahlad, saving him from the flames of the bonfire and burning Holika to her death.

It is written in Narada Purana "Some foolish or childish people, due to constant fear of blood sucking demons, created Holika. Hence, I worship you and seek power, wealth and prosperity for myself. Holika is a demoness and she scares Prahalad. Hence we burn her with wood and music. Burning of Holika is also symbolic of burning the year as well as sexual desires."