There are two resaons, why holi is celebrated-

1. On this day, Prahlad sat on holika... Holika had been granted an invisible sheet from lord Vishnu that would not allow her body to burn. But lord vishnu, used a slight breeze and the sheet lifted in the air and landed on prahlad.

2. One day, Lord Krishna returned home sad.... he said to his mother, 'why is Radha so fair and I so black?" Yashoda, (his mother) told him to smaer colours on Radha so that she would not look pretty......