Tanabata is a Japanese tradition wherein people write their wishes on tanzaku papers (colorful, small strips of papers) and hang them on bamboo branches. People also decorate bamboo branches with various kinds of paper decorations and place them outside their houses.
It's said that tanabata's origin dates back to more than 2,000 years ago with an old Chinese tale. Once there was a weaver princess named Orihime and a cow herder prince named Hikoboshi living in space. After they got together, they were playing all the time and forgot about their jobs. The king was angry at them and separated them on opposite sides of the Amanogawa River (Milky Way). The king allowed them to meet only once a year on the seventh day of the seventh month in the lunar calendar. Tanabata literally means the night of the seventh, and it's also known as the star festival. It's believed that Orihime and Hikoboshi can't see each other if the day is rainy, so people pray for good weather and also make wishes for themselves.
Depending on regions, it's celebrated on July 7 or August 7 (which is around the seventh day of the seventh month in the lunar calendar) in Japan. Many cities and towns hold Tanabata festivals and set colorful displays along the main streets. It's fun to walk through the long streamers on the street. In some regions, people light lanterns and float them on the river, or float bamboo leaves on the river.