The bonfire stands for the victory of faith and goodness over arrogance and cruelty. People offer coconut, grain and cow-dung cakes into the fire and pray that negativity, illness and ill will may be burned away, so that the colourful celebration the next day begins with a clean slate.
Holika Dahan is also a harvest moment. The winter (rabi) crops of wheat, barley and gram are ripening, and many families roast ears of the new grain in the fire and share them as prasad, a way of thanking nature before the harvest.
Timing is given special care. The fire is traditionally lit after sunset during Pradosh Kaal while Purnima is present, and outside Bhadra, a period considered unsuitable for auspicious work. This page shows the Holika Dahan Muhurat (Pradosh, free of Bhadra) and the Bhadra timings for your city.
Hiranyakashipu, a powerful demon king, had been granted a boon that made him almost impossible to kill. Growing proud, he ordered everyone in his kingdom to worship him alone. His young son Prahlada, however, was devoted to Vishnu and would not stop praying. The king tried again and again to kill the boy, but each time Prahlada was saved.
Finally the king turned to his sister Holika, who had a shawl or boon that protected her from fire. She sat in a burning pyre with Prahlada on her lap, intending to kill him. But as Prahlada kept chanting Vishnu's name, the protection left Holika and passed to him: Holika was burned, and Prahlada walked out unharmed. Later Vishnu appeared as Narasimha, half man and half lion, and ended Hiranyakashipu's tyranny. The bonfire on Phalguna Purnima remembers Holika's burning and Prahlada's faith.