The "bon" in O-bon (盆) itself refers to the vessels (plates, bowls, tupperware etc) in which offerings are placed for the spirits of the deceased. The physical bowl has come to refer to the holiday or the period where the holiday is celebrated in modern lingo. Of course, O-bon as a holiday could be translated as “honorable container day” but then it wouldn’t sound as cool as “Japanese Festival Of The Dead.” The practice of offering food and drinks (such as Pepsi-Watermelon Cola and Wasabi Potato Chips etc) to the visiting spirits is believed to have spread from the original ceremony in Japan’s hip 600s.

Japan Subculture Research Center