The demon king Narakasur had become a menace. King of Pragjyotisha, present day Assam, and the son of Bhudevi (Mother Earth), he had become arrogant and drunk with power. Wherever he went he spread fear and destruction; the cruel king however exceeded his share of misadventures on earth when he took away the earrings of Aditi, the mother of all gods, and also kidnapped 16000 women who were the daughters of different gods and saints.
Aditi was related to Lord Krishna’s wife, Satyabhama who appealed to Krishna and he in turn immediately mounted his vahana, Garuda and attacked Narakasura. Now Bhudevi had been given a boon that her son would be killed only by Vishnu, in his Krishna avatar. A fierce battle took place and Krishna killed the demon general Mura (and earned the epithet, Murari). Narakasura used his thunderbolt on Krishna, but it didn’t work and at the end Krishna beheaded Narakasura with his sudarshana chakra.
A slightly different version says that Narakasura had a boon from Lord Brahma wherein he would be killed only by his mother. Satyabhama was an avatar of Bhudevi and thus his mother too, which was unknown to Narakasura. During the war, Krishna was injured and feigned an inability to fight. This enraged Satyabhama so much, that she struck Narakasura with such vigour that he died instantly.
In both the versions, a dying Narakasura asked for a boon that his death be celebrated by one and all on earth, and thus the day is celebrated as Naraka Chaturdashi, the day before Diwali and also referred to as Chhoti Diwali. Not only was Narakasur killed and the precious earrings of Aditi recovered, but the 16,000 girls were also released. And to protect the girls, Krishna is said to have married all of them.
He also smeared his forehead with the blood of Narakasur and when he arrived home after the battle; his wives massaged him with perfumed oils and gave him a royal bath. Ever since it has become a custom in parts of Maharashtra, to get up early on the day of Narak Chaturdashi and have an oil-bath before sunrise. Many apply kumkum on their foreheads, as a ritual before the bath, imitating the smearing of the blood of Narakasur by Lord Krishna.