Here is some great information which I got from the Portland Japanese Garden Web site. All of the words below are theirs, not mine. I would like to credit them. If you click on the link it below it will take you directly to their site.
"Also known as the Star Festival, Tanabata has its roots in a Chinese legend about the love between a young princess, Orihime, who was a weaver, and a handsome young cowherd named Kengyū (represented by the stars Vega and Altair). As a result of their great love for each other, the weaver neglected her work weaving cloth for the gods and the herdsman neglected his cattle. In punishment, Orihime’s father, the emperor of the heavens, moved the star-lovers to opposite sides of the Milky Way and stated that they would only be allowed to meet once a year: on the seventh day of the seventh month. On this night a flock of heavenly magpies use their wings to form a bridge that the weaver can cross to join her lover. The magpies will only make the bridge if July 7 is a clear night; if it rains, the lovers must wait another year.
One popular Tanabata custom is to write wishes and poems on colorful strips of paper called tanzaku and hang them on fresh-cut bamboo branches in the hope that the wishes come true. Some say the bending Tanabata bamboo poles symbolize the bridge that the lovers will cross for their brief reunion.
While Tanabata is often considered a festival for children, who make other bright paper decorations to hang on bamboo poles to attract the attention of Orihime and Kengyū, many adults are often drawn to write their own poems or wishes. Tanabata bamboo poles are placed in front of schools, some homes, and many businesses. Some big department stores have huge bamboo groves and provide strips of paper for customers to write their wishes on.
Qi Xi, which was celebrated in the Kyoto Imperial Palace beginning in the Heian period. The festival spread to the general public by the early Edo period, became mixed with various O-Bontraditions, and developed into the modern Tanabata festival. In the Edo period, girls wished for better sewing and craftsmanship, and boys wished for better handwriting by writing wishes on strips of paper. At this time, the custom was to use the dew left on taro leaves to create the ink used to write wishes.
One of the five Go-Sekku seasonal festivals of Japan, Tanabata is traditionally celebrated on the seventh day of the seventh month."