“Hinamatsuri (Doll’s Festival)” is held on March 3rd. This is a day to pray for young girl’s growth and happiness. It is also called “Momo no sekku (Peach Festival)” because of the peach blossom season on the old lunar calendar. May 5th is “Kodomo no hi (Children’s Day),” and this is so called “Boy’s Festival.” While Children’s Day is a national holiday, Hinamatsuri is not.
The 3rd of March – (by the Solar Calendar) is called “Hina-no-Sekku”,”Hina-Matsuri” (Doll’s Festival) or “Momo-no-Sekku” (Peach blossom’s Festival) which used to be one of the important seasonal events of ancient China and has now developed into a function symbolic of Japanese arts and customs and has been in existence in Japan since the Edo Period (17 – 19 centuries).
Momo-no-Sekku used to be held on the 3rd of March according to the Lunar Calendar, though today it is actually not until early April that the peach blossoms begin to bloom, and that is how the name of this festival came about.
On this day families with young daughters celebrate this event at home to ensure their daughter’s future happiness. That is, they decorate hina-Ningyo (special, beautiful dolls which are replicas of an ancient emperor and empress and their subordinates).
Source: Girl’s Friday
Below is another attribution for the origin of the celebration.
Most families with girls display “hina-ningyo” (special dolls for Hinamatsuri, see the photo below) and dedicate peach blossoms to them.
Let’s light the lanterns
Let’s set peach flowers
Five court musicians are playing flutes and drums
Today is a joyful Dolls’ Festivalｌ
The origin of Hinamatsuri is an ancient Chinese practice in which the sin of the body and misfortune are transferred to a doll, and then removed by abandoning the doll on a river. A custom called “hina-okuri” or “nagashi-bina,” in which people float paper dolls down rivers late on the afternoon of March 3rd, still exists in various areas. Source: About.com