Bon Odori meaning simply Bon Dance,
Bon is a Japanese Buddhist holiday to honor the departed (deceased) spirits of one's ancestors. This Buddhist festival has evolved into a family reunion holiday during which people from the big cities return to their home towns and visit and clean their ancestors' graves. Traditionally including a dance festival, it has existed in Japan for more than 500 years. It is held from July 13 (August 13 according to the lunar calendar still observed in many regions) to July 15 ("Welcoming Obon" and "Farewell Obon" respectively) in the eastern part of Japan (Kantō, and in August in the western part. In recent years, however, most parts of Tokyo, and by extension, the media, hold Obon in August to coincide with the summer holiday period. Obon shares some similarities with the predominantly Mexican observance of el Día de los Muertos, such as customs involving family reunion and care of ancestors' grave sites.

Obon is a shortened form of the legendary Urabonne/Urabanna. It is Sanskrit for "hanging upside down in hell and suffering" (Sanskrit:Ullambana). The Japanese believe they should ameliorate the suffering of the "Urabanna".

Bon Odori originates from the story of Mokuren, a disciple of Shakyamuni, who saw a vision of his deceased mother in the Realm of Hungry Ghosts where she was indulging in her own selfishness. Greatly disturbed, he went to the Buddha and asked how he could release his mother from this realm. Buddha instructs him to make offerings to the Sangha on the fifteenth day of the seventh month. The disciple did this and, thus, saw his mother's release. He also began to see the true nature of her past unselfishness and the many sacrifices that she had made for him. The disciple, happy because of his mother's release and grateful for his mother's kindness, danced with joy. From this dance of joy comes Bon Odori or "Bon Dance", a time in which ancestors and their sacrifices are remembered and appreciated.

Comments is taken from Wikipedia!