Diwali is also called Deepavali in many Sanskrit based languages. Deepam means kindle (flame, light or diya) and vali means a row, thus the Deepavali translates to a "row of lights". Deepam is part and parcel of Hindu religion and it often represents the "knowledge element" of life. Deepam is used in almost all religious occasions of Hinduism.
While in South India, it is celebrated as Naraka Chaturdashi - which is the fourth day from no-moon day, while in North India, it is the biggest festival and is celebrated for 5 days. It is a coincedence that Lord Rama and Lakshma returned from Vanavasa on the same day and Pandavas returned from Agnatavasam on the same day. So the people invited them with lights - which is also though to be one of the significances of Diwali.
While Diwali just means a festivals of lights, eventually, people of India started burning firecrackers, which was nowhere mentioned in any epics. While this was not a bit of a concern a few decades ago, now with the increasing polution, global warming and endangered species, fire-crakers just invites the bad things, which is not the motto or the festival. When it comes to sound pollution associated with it, we should all be aware that, Diwali is not at all associated with sound and burning sound making bombs is a foolish activity (although I do, for a small extent).
Read more about Diwali at Wiki: http://en.wikipedia.org/wiki/Diwali