Loi Krathong takes place on the evening of the full moon of the 12th month in the traditional Thai lunar calendar. In the Western calendar this usually falls in November.
According to the Royal Institute Dictionary 1999, loi (ลอย) means “to float”, while krathong (กระทง) has various meanings, one of which is “a basket to be floated on water in the Loi Krathong festival”. Several translations of krathong are found, such as “floating crown”, “floating boat”, “floating decoration”. The traditional krathong are made from a slice of the trunk of a banana tree or a spider lily plant. Modern krathongs are more often made of bread or styrofoam. A bread krathong will disintegrate after a few days and can be eaten by fish. Banana stalk krathong are also biodegradable, but styrofoam krathongs are sometimes banned, as they pollute the rivers and may take years to decompose. A krathong is decorated with elaborately-folded banana leaves, incense sticks, and a candle. A small coin is sometimes included as an offering to the river spirits.
On the night of the full moon, Thais launch their krathong on a river, canal or a pond, making a wish as they do so. The festival may originate from an ancient ritual paying respect to the water spirits.
Taken from Wikipedia.
Loy Krathong at my local village by the ocean, Pala Beach