The Kandy Esala Perahera, also known as the Festival of the Tooth, is one of the greatest Buddhist holidays in the country and is celebrated with elegant costumes. A historical procession to pay respect to the Sacred Tooth Relic is held annually in July or August on the Full Moon Poya Day according to the Hindu calendar. The festival is all about decorated elephants, traditional dances such as fire-dances and whip-dances, and the food of course. The Esala celebrations typically end with a water-cutting ceremony (also called the diya-kepeema ritual), where people literary cut the water to pray for good harvests.
Locals believe that the water collected at the diya kaepima is sacred and able to remove evil. They will often collect this water at one spot or sprinkle themselves with it.
The Kandy Esala Perahera claims to be the most splendid visual celebrations found in Sri Lanka. Its festivities continue for ten days, so don't haste and save at least three days to savour the cultural rituals and explore the World Heritage-listed Kandy. Note that the festival gets more vibrant and more crowded with each succeeding day. To get a good viewing spot you'll have to arrive at least 3-4 hours before the start. Also, if you wish to enter the temples, remember to cover up—you won't be let in with your shoulders, waist or knees exposed. Bringing a sarong or scarf is a nice solution.