Waving of lamp or Diya before the murti or the image of deity is an indispensable aspect of the worship and prayer in Hinduism. The circling of light (diya) ritual is known as Dipa, Arati, Aratika or Niranjana. It is performed usually at the end of a Hindu puja. For the ritualistic circling a lamp with one, three, five or seven wicks dipped in clarified butter or oil is used. Some people prefer to use camphor (Karpura).
The waving of the lamp is also recognition of the fact that whatever is born perishes and is later born again. This wheel of life and death has been going on perpetually from time immemorial like the cycle of sunrise and sunset. We pray to the deity to save us from this cycle. Lucky are those that are able to attain Moksha and merge with the Supreme Truth (Brahman). The sole aim of human being is to attain Moksha or liberation and this has to be attained while living on earth. When we are able to drop the thought of the other and realize that there is no second we attain Moksha. (This is my thought - you can post comment on your thoughts of the same and also criticisms.)
It is mentioned in the Skanda Purana that a well performed Arati makes up for the lapses made during a puja and worship.
The ritualistic circling of the lamp is accompanied by the ringing of bell, blowing of conch and is some regions the beating of a flat metallic instrument.
Some people chant mantras while waving the light before the deity. Usually, at home, the Diya is waved one or three or five times before the deity.
At temples and sacred places the ritualistic circling of Diya is done before a large number of devotees. Hindus believe it highly auspicious to be part of an Arati. The number of waving of the light varies from temple to temple. The lamp that is used comes various shapes and sizes – some are single tiered, some are three or five or seven or nine.
One of the most elaborate and awe inspiring circling of Diya is performed evening at the Ghats along Ganga River in Varanasi