Although the Jade Emperor (Yùhuáng shàngdì 玉皇上帝), ruler of the universe, is usually an even tempered monarch, it gets lonely at the top, and he is often very sad. Once upon a time he became quite envious of the happiness of people on earth, and sent a magic goose (shén’é 神鹅) to breath out flames that would burn down the world.
But a kindly maid in the Jade Emperor’s palace hurried down to the world to warn people. The palace maid also told people that when the magic goose was caged, it could not breath flames, and the people managed to catch the goose and cage it as soon as it landed.
One of the people proposed that everyone make red lanterns so that the world would look as though it were burning; that way the Jade Emperor would think that the goose’s mission had been carried out.
This is the origin of the lantern festival on the 15th day of the 1st lunar month.
(You will be pleased to learn that the longer he has watched over the people on earth, the more the Jade Emperor’s envy of human beings has faded, until today he no longer feels any envy at all, and indeed some say humans have even awakened his compassion.)