The festival is an event held by the residents of Wano Country's capital to mourn the dead. Sky Ships (空船 Sorabune?) are a part of it where the grander the celebration, the better their feelings can reach the departed.
After Oden's death, the Fire Festival became a commemoration of the Beasts Pirates saving the nation from the "evil" Kozuki Family. During the event, the Shogun of Wano, Kurozumi Orochi, and his procession travel to Onigashima, Kaido's residence, to show the country's gratitude.
However, this is a facade as the real purpose is for the Shogun to have a banquet with his allies at the expense of the residents.
20 years ago, as part of the Beasts Pirates and the Shogun of Wano, Kurozumi Orochi, plot to take over Wano Country from the Kozuki Family, Orochi had the head of the family, Oden executed, while the Beast Pirates burn down the family's home, the Oden Castle, seemingly killing the rest of the family and their allies. Following that, the Shogun and the pirates took control on the land, and claimed to have free to country from Oden's dangerous "Open Country Idea".
Believing the Beast pirates has issued in an era of peace, the residents of Wano started celebrating their feat, and established the festival as a way to pay their respects to the crew.
Wano Country Arc
About two weeks before the upcoming festival, Monkey D. Luffy and his group arrived at Wano for the Ninja-Pirate-Mink-Samurai Alliance's plan to take down Kaido. Shortly after his arrival, he met with Kin'emon who explained the alliance's plan of attacking the Beast Pirates on the night of the festival.
Four days later, the shogun of Wano, Kurozumi Orochi, had a private prelude party for his close allies. For her part in the alliance's plan, Nico Robin infiltrated the party under the guise of one of the dancing geisha in order to get close to the shogun.
As the day of the festival draw near, The alliance manged to increase their men-power and unbeknownst to them, the Beasts Pirates were joined by Scratchmen Apoo accompanied by the Numbers, and made a Pirate Alliance with the Big Mom Pirates, preparing to join the festival as well to celebrate their union.
The Day before the festival the Kozuki Momonosuke, Shinobu, and the Nine Red Scabbards that are on Wano headed from Kuri toward the meeting port of departure. Meanwhile, Orochi receive information about the alliance's plan.
On the day of the festival, the country celebrated, and Orochi headed toward Onigashima. Meanwhile, Momonosuke's party discover their meeting spot with their allies deserted, and the port and their ships in ruins. Panicking, Kin'emon tried to contact his men but could not reach anyone, including the Straw Hat Pirates.
- Traditionally, a real world fire festival is a common Japanese custom of igniting a large bonfire during celebratory events.