'Seventh night' usually translated as 'star festival' since it celebrates a legend from old China of the romance between a heavenly cowherd and a weaving girl. They neglected their work through love for each other and were punished by the god of the skies who ordered them to be set apart at each end of the ama-no-gawa, the celestial river or milky way. They were to work hard and could see each other only on the seventh day of the seventh month. On this day they could enter the celestial river because the god of the skies was away attending Buddhist sutra-chanting. The festival was officially recognised in 755 and was one of the five main annual festivals until the Meiji restoration. Tanabata involves the whole family and is widely celebrated in homes and schools regardless of religious affiliation. People connected with agriculture and weaving pray for help with these occupations, and youngsters enjoy making their own wishes on paper stars or star-spangled tanzaku (narrow paper strips for poetry). The major venue for the celebration of tanabata is the city of Sendai in the north-east of Japan, where homes display decorations of tanzaku hung from bamboo poles and the streets are decorated with great colourful paper streamers. The date of the festival is July 7th of the lunar calendar and like other big tanabata festivals in the north of Japan, which are based in towns rather than at shrines or temples, the Sendai tanabata takes place in August (6-8th). Tanabata tends to merge with bon celebrations in mid-August.
A Popular Dictionary of Shinto. Brian Bocking.