According Hindu Mythology, the Asura or demon King Mahabali made the utopian kingdom a reality. His fame spread all over the earth and the netherworld and slowly into the heaven. Indra, the king of Devas and the ruler of heaven, felt threatened by the growing popularity of Mahabali. Aditi, the mother of Indra, observed a penance called 'payovrata' to help her son and pleased with her devotion Lord Vishnu was born as Vamana, a dwarf, to Aditi.
Vamana approached Mahabali who was conducting a yajna. King Bali asked Vamana to choose anything that he wanted from his kingdom. Vamana asked for just three steps of land. And the king agreed readily.
Suddenly, the dwarf sized Vamana grew into the skies and with one step covered the earth and with another step the heavens. With no place to keep the third step, Mahabali offered his head, which was pushed by Vamana into the netherworld or pathalam.
But before sending Mahabali to the netherworld, Lord Vishnu gave Bali the boon that he can visit his subjects once in a year. The day Mahabali visits his subjects is celebrated as Onam.