This festival is celebrated on the night of (Maha) vad 14, when Lord Shiv manifested as Shivaling. There are numerous stories extolling the glory of Mahadev (Lord Shiv) in the Puranas.
The Shiv Puran relates a story of Maha Shivaratri's glory.
In ancient times, a Bheel (forest inhabitant) named Gurudruha trudged through a forest to hunt deer. At night, without having sighted a single animal, he unknowingly climbed a bili tree on the banks of a lake. Later at night, a doe arrived to drink water. Gurudruha aimed his bow and arrow at her. While aiming, he unknowingly dropped some bili leaves and his drinking water below on a Shivaling. The deer then requested him to allow her to entrust her fawns to her husband, after which she would return. After much haggling he agreed. While awaiting her return, he stayed awake by aimlessly plucking leaves and dropping them below. Again they fell on the Shivaling. Thus he unknowingly performed its puja while remaining awake all night.
Finally the doe returned with her family, She informed him that along with her, he'd have to kill her family too. As he aimed, some more leaves fluttered down on the Shivaling. The collective punya (spiritual merit) accrued from the puja performed unknowingly, eradicated all his sins. This purified his heart. Repenting his flawed life of sin, he set the deer free. As he sat repenting, Lord Shiv manifested in front of him and granted a boon, "You shall be born in a town known as Shrungver, as a man named Gruha. Lord Vishnu will grace your home as Lord Rama and redeem you."
Shivji also blessed the deer which attained a better destiny.
The Garud and Skand Puranas cite similar versions, about a king named Sundersenak and an evil hunter named Chand, respectively.
On this day, fasting and night vigil - jaagaran, are advocated. Hindus worldwide perform Shiva puja with bili leaves(Aegle marmelos) and milk abhishek. On Mt.Girnar in Saurashtra, a grand mela is held, where people throng to have darshan of sannyasis and mystics.
Bhagwan Swaminarayan has enjoined devotees to celebrate the day by doing Shiva puja and faraar in the Shikshapatri (79) and pujan with Bili leaves (Shik. 149). He has also included Shiv among the five foremost deities of the Hindu Dharma (Shik.84). Additionally, He regards Shiva and Narayan with equanimity (Shik.47).
During His time, He consecrated Lord Shiv's murti in the Junagadh mandir, as Siddheshwar Mahadev. Continuing the tradition, HDH Pramukh Swami has consecrated the murtis of Shiv-Parvati in the new Shri Swaminarayan Mandir, in Neasden, London, where the festival is celebrated with great eclat, with special puja and milk abhishek, every year.