Similar to the Gion Festival, the Daimonji Festival 大文字祭 or Gozan Okuribi 五山送り火 has superstitious origins. This festival marks the zenith of Obon お盆, a period from August 13-16. It entails welcoming back the spirits of ancestors and then sending them off again. In stark contrast to the goryo 御霊 of the Gion Festival, these spirits are not considered evil or vengeful. Activities such as the Bon Odori-Dance for Ancestors 盆踊り are held throughout this period and the Daimonji Festival marks the end of Obon.
Fire was used to send the souls of ancestors back to the underworld. People would light torches and raise them upwards into the sky to light the way for the souls. Later, Shogun Ashikaga Yoshimasa had the 大 character fashioned into the side of Daimonjiyama mountain and lit in memory of his son Yoshimasa’s passing. Yoshihisa passed away at the young age of 24 from a brain aneurism. His lifestyle reportedly involved much alcohol and women and this seems to be one of the major contributors to the brain hemorrhage that claimed his life.
Yoshimasa was obviously deeply saddened over the loss of his only son and heir to his title and estate. Yoshimasa watched the inaugural lighting of the 大 character from the Togudo at the foot of the Daimonjiyama Mountain. This was the origin of the present Daimonji festival. Eventually, it transformed into its current form where other massive Chinese characters now serve as beacons, lighting the way for the souls of ancestors to return back to the underworld.
On the 16th they start lighting characters at 8pm. First is the “big” 大 character、located behind Ginkakuji is lit at 8:00 pm; next “wonderous dharma” 妙 and 法 characters north of Shimogamo Shrine, near the Botanical Gardens at 8:10; the “boat” 船 character located deep in the northeast is lit at 8:15 and the “small” 大 character behind Kinkakuji is also lit at 8:15; lastly at 8:20 the “Shinto Shrine gate” torii- is set aflame in the Arashiyama area. I’ve heard vantage points exist where it is possible to see all 5 at the same time. Personally, I have yet to find any.
Popular vantage points are located along the Kamo River around the Shimogamo Shrine and the intersection at Imadegawa/Nishioji. Kyoto Tower and other places with high vantage points would probably provide you with a nice view too.
◊ Pictures from Wikipedia Commons
◊ Information from Wikipedia; 臨済相国寺派 Homepage; Japanese Buddhist Statuary Homepage