According to 

Hinduism, Mahabali was the great-great-grandson of a Brahmin sage

named Kashyapa, the great-grandson of a demonic dictator, Hiranyakashipu, and the grandson
of Vishnu devotee Prahlada. This links the festival to the Puranic story of Prahlada of Holika fame in
Hinduism, who was the son of Hiranyakashipu. Prahlada, despite being born to a
demonic Asura father who hated Vishnu, rebelled against his father's persecution of people and
worshipped Vishnu. Hiranyakashipu tries to kill his son Prahlada, but is slain by Vishnu in
his Narasimha avatar, Prahlada is saved.[18]

The dwarf Vamana taking a leap-step is a part of many Hindu temple arts (above), and one legend behind
Onam.

Prahlada's grandson, Mahabali, came to power by defeating the gods (Devas) and taking over the
three worlds. According to Vaishnavism, the defeated Devas approached Vishnu for help in their
battle with Mahabali.[10] Vishnu refused to join the gods in violence against Mahabali because
Mahabali was a good ruler and his own devotee. Mahabali, after his victory over the gods, declared
that he would perform a Yajna (homa sacrifices/rituals) and grant anyone any request during
the Yajna. Vishnu took the avatar – his fifth[19] – of a dwarf monk called Vamana and approached
Mahabali. The king offered anything to the boy – gold, cows, elephants, villages, food, whatever he
wished. The boy said that one must not seek more than one needs, and all he needed was "three
paces of land." Mahabali agreed.[10][20]
Vamana grew to an enormous size and covered everything Mahabali ruled over in just two paces.
For the third pace, Mahabali offered his head for Vishnu to step on, an act that Vishnu accepted as
evidence of Mahabali's devotion. [10] Vishnu granted him a boon, by which Mahabali could visit again,
once every year, the lands and people he previously ruled. This revisit marks the festival of Onam,
as a reminder of the virtuous rule and his humility in keeping his promise before Vishnu. The last day
of Mahabali's stay is remembered with a nine-course vegetarian Onasadya feast.[10][21]
The name Thrikkakara is originated from 'Thiru-kaal-kara' meaning 'place of the holy foot'. The main
deity at Thrikkakara Temple is Vamana, the smaller temple to the side has Shiva as the deity.
Vamana temple is known as 'Vadakkum Devar' and the Shiva temple is known as 'Tekkum Devar'. A
number of subsidiary deities have been installed at Thrikkakara Temple.[22] The 1961 census report
on Onam festival states :[22]
Though the Vamana temple is accepted as the main temple at the elite level, the local people
consider the Shiva temple as the more important one. They believe that Shiva was the 'Kuladeivam'
(family deity) of Mahabali and that there was no Vamana temple at that time. The palace of Mahabali
was situated at the place where the Vamana temple is at present. After the fall of Mahabali, his
palace was destroyed and later on Vamana was installed on that spot by the saint Kapila.