Watanagashi Festival
History 
The festival began centuries previously as the Watanagashi, or
Intestines-Drifting Festival. It was a time to cast off sins of the
villagers by sacrificing them with the blood of a living human. Said
human sacrifice would be publicly 
In modern times, however, the true Watanagashi became viewed as too violent and cruel to be practiced. Instead, the villagers began practicing the modern Watanagashi based on a similar concept using the alternate meaning of the prefix Wata-, which can mean cotton as well as intestines. Thus was the Cotton-Drifting Festival born. Everyone in the village would contribute old coats and furniture to the village to be gutted for their leftover cotton. Said cotton would then be sewn into a large futon which would take the place of the traditional living human. On the night where the human is traditionally subjected to the intestine gouging, the priest or miko would perform the dance and instead use the hoe to cut the futon and gouge out the cotton in place of intestines. Each villager than takes a small amount of this cotton and sets it adrift on the river to absorb and "drift away" the sins and sadness of the villagers.
Application
One specific past use of the true Watanagashi has been confirmed and explored in detail. Hanyū was sacrificed centuries before the start of the series by her own daughter Furude Ōka,
after Hanyū offered herself up. Her unique horns had led the village
telling her, and eventually convincing her, that she was a demon god
unworthy of life. She wished to die to escape the world and carry away
its sins. When her daughter sacrificed her, she became a true god, named
"Oyashiro-sama" by her daughter. Although largely unused in modern times in the public's eye, knowledge and practice of the true Watanagashi has been passed down in the Three Great Houses of Hinamizawa. The Sonozaki family even keeps a basement full of Watanagashi torture devices to punish or even kill those who oppose them.
The following are specific key applications throughout the series:
- In Tatarigoroshi-hen and Minagoroshi-hen, the Sonozaki family catches Rina/Ritsuko stealing money from their male relative. In revenge, they kill her Watanagashi-style and throw the remains into the river in a bag. In Tatarigoroshi-hen, this is the bag found by the landlady at the beginning of the chapter.
- In Watanagashi-hen and Meakashi-hen, Shion uses the Watanagashi torture/murder tactics to kill Kimiyoshi and threatens to use them on Satoko and Keiichi; the former dies during the torture stage from blood loss, while the latter convinces Shion to stop by reminding her of her lost love.
- In Meakashi-hen, it was revealed that Shion and Mion had been subjected to torture via ripping their fingernails out Watanagashi-style in 1981 to pay for each others mistakes.
Role
The Watanagashi sacrifice of Hanyū in the distant past gave her her
god-like power to restart time, which caused the eternally repeating
June of 1983. In the current time of Higurashi, the coming Watanagashi festival is viewed by the villagers with both excitement and apprehension. This is because every year for the past four years (1979-1982 ), one person has died and one person has gone missing either on the night of Watanagashi or the day immediately after. While the truth behind these occurances is explored in Matsuribayashi-hen, it is largely blamed by the villagers on the Curse of Oyashiro-sama, who is angry in recent years at those who sought to either leave the village, or those who supported the Hinamizawa Dam Project (For example: Hōjō Satoko's parents).
Aside from playing a key role in both the distant and recent past of the series, the Watanagashi festival is notable for the role it plays in June of 1983 as the turning point of each arc. In each world on the night of Watanagashi, two deaths will always occur: Tomitake Jirō (clawed at own throat and bled to death) and Takano Miyo (found as a burned corpse in the mountains). In the following days, Furude Rika will inevitably die either by suicide (Meakashi-hen and Tatarigoroshi-hen) or by disembowelment by the Yamainu. Also, her friends will succumb in these days to whatever paranoia has been growing in them previous to the festival.