It was believed that Lord Vishnu killed Hirankashyap’s brother. To take revenge from Lord Vishnu, Hirankashyap asked his sister, Holika, to help him kill his own son, Prahalad, who was Vishnu’s disciple. Holika tried to burn Prahalad but in the process ended up being burnt in fire herself.
On this occasion, we burn holika and it signifies marking an end to all the evil thoughts and getting rid of all the sins. Thus, at this time, if you ask for any good things while mother holika is burning then they will come true.