Shivratri - Why do we observe

There once lived a tribal man who was a hunter and a staunch a Shiva devotee. He used to go for hunting on all days to feed his family. One day the hunter lost his way while hunting and was trapped in the forest at night.

Soon wild animals started to gather around him and he climbed a Bel or Bilva tree. Sitting there he remembered his wife and children and tears started rolling from his eyes. In order to keep himself awake, he started plucking Bilva leaves and dropped it down repeating ‘Om NamahShivaya’ – the Panchakshari Mantra. The hunter unknowingly fasted the whole day and did not sleep in the night.

In the morning, he discovered that he had been dropping the Bilva leaves on a Shivlingam. The Shivlingwas also washed with his tears.

He returned home and when he was about have his food, a beggar came at his door. The hunter fed the beggar and then had his food.

The beggar was Lord Shiva himself and the hunter had darshan of Bholenath and was able to feed Mahadeva, who feeds all the living beings.

And the hunter realized the beggar was Shiva when he died and was carried to the Shivaloka.
The hunter was later born as King ChitraBhanu who could remember his previous births. And he discussed the importance of Shivaratri with Sage Ashtavakra.

Bhismha while on the bed of arrows mentions the story in the Shanti Parva of Mahabharata after the 18-day Great War in the Mahabharata. Thus the world came to known about the importance of Mahashivaratri.

Origin of Mahashivaratri based on SamudraManthan – Churning of Ocean

This is a famous legend on Shivaratri and happened during the churning of ocean by Devas and Asuras to get ‘Amrit.’ While churning the ocean, highly toxic poison, Halahala, came out and threatened to destroy the universe.

Lord Vishnu asked the ‘devas’ and ‘asuras’ to approach Lord Shiva and request to save the world.

Lord Shiva immediately agreed to help them and drank the poison. For the poison to have no effect, Lord Shiva should not sleep. So the ‘devas’ and ‘asuras’ kept praying the whole night. Pleased with the devotion Lord Shiva said ‘whoever worships me on this day will get their wishes fulfilled.’ (There is another version to this story in which Goddess Parvati stops the poison from spreading by holding Shiva’s neck)

Origin of Shivaratri based on Lord Vishnu and Lord Brahma searching for the origin of Shiva Lingam

Lord Vishnu, Brahma wanted to know who was superior, and this led to a fight. Lord Shiva intervened and said whoever can find out the origin or end of Shivling is superior. Lord Shiva appeared before them in the form of a huge pillar of fire. Lord Vishnu went down searching and Brahma went up searching. Both traveled and traveled but never reached the beginning or end.

It is impossible to find a beginning and end to the Supreme Being until and unless the Supreme Being wishes to incarnate in a form that human eyes can accommodate.

After the futile search, Lord Vishnu and Brahma prayed to Shiva and appeared before them in the form of Jyotirlinga and this day of the appearance of Lord Shiva is celebrated as Shivratri.

Apart from these important legends, it is said that the reunion of Lord Shiva and Parvati happened on the Shivratri day. Another legend states that Lord Shiva performed the Taandava on this day.

The SHIV LING is worshiped as the very image of Shiva, indicating that Shiva has neither male nor female form. Shiva is invoked as an incorporeal point of light. That is why the 12 renowned Shiva Temples in India are also known as Jyotirlinga, signifying light.

The three-line mark on the Shiv-ling known as Tripundi symbolizes the three-fold characteristics of the Trimurti, the lord of three subtle deities; Trinetri or the one who has the third eye of wisdom; Trikaldarshi or the one who surveys three aspects of time and Triloknath or the lord of the three worlds.

Shiva is also known as Shambhu or Swayambhu – the One who incarnates on his own, onto this Earth, or the One who cannot be created – and Sada Shiva meaning that he is the Supreme Soul.

The Sanskrit word Shiva, according to some scholars, is the confluence of two phonetic part, Shi and Va, meaning redeemer and liberator from sins and sufferings………..(Source, Hindu Site)