The seventh lunar month is known as the Ghost Month in the Chinese cultural sphere. This is a time when ghosts and spirits, including those of the deceased ancestors, come out from the underworld to visit the realm of the living.
There are several stories behind the Ghost Month. According to a Chinese Taoist legend, the deity in charge of the underworld grants the spirits reprieve for their year-long suffering by allowing them to come out to seek food and enjoyment. These spirits are believed to be ancestors of those who forget to pay tribute to them after they died, so they were never given a proper ritual send-off. On the last day of the seventh lunar month, the spirits again return to the underworld.
During the whole Ghost Month, and especially on the Ghost Festival, people prepare food offerings to the spirits, and also hold ceremonies to relieve the spirits of their suffering. Often people burn joss paper, or "ghost money" for the spirits to use in the underworld, although the practice has been discouraged in Taiwan due to environmental concerns.
As the ghost month is a time when a large number of spirits come out to haunt the world of the living, there are many things that people believe that they should not do. During the ghost month, people generally avoid holding weddings, moving house, and going on holidays. It is also said that people should avoid hanging their laundry to dry at night because wandering spirits may mistake the clothes for living people and come to possess the clothes.