Bali, the powerful asura king who was the great grandson of Hiranyakasibu had conquered the three worlds, but in spite of being an asura, he ruled his land and people with justice and everyone respected and loved him.Even though Bali was just, the kingdom of the gods had to be returned to them, who felt humiliated at the loss. Lord Vishnu could not fight with such a virtuous king, and therefore he took the guise of a Brahmin boy.
Bali was performing a yagna and for the success of the yagna he had to provide anything that a brahmin seeks. Lord Vishnu in his Vamanavataram begged for just three feet of land. This request was considered funny, for three steps of Vamana's feet would measure upto a very small piece of land only. Bali humbly requested him to ask for something better which he would grant. But Vamana insisted on his three feet of land. To the astonishment of all present, Lord Vishnu as Vamana began to grow to a great height and with one step he covered the whole earth, and with his second step he covered the entire sky and region above.
With the entire universe covered, Bali had no more land to offer. He bowed down in front of the Lord and offered his head for the third step. Lord Vishnu had thus regained the power from the asura king. Being extremely pleased with the virtuosity of an asura king, he placed his foot on his head and sent him to rule over the lower regions.
There are many temples all over India with the form of Vamana dev being worshiped especially in Kanchi.