Film festivals give an opportunity to film makers to show off their films.
Many Independent film makers, as well as screen writers and directors submit their works to festivals in the hopes of getting noticed by one of the larger studios.
A number of them are organized by big name studios but smaller studio's or organizations also put them on.
Not all of these events will be seen by the people you may want it them to reach so you should to audiance.
They became popular because many big studios will only work with people who already have an "in" in the industry which gives them immediate recognition "for outstanding work".
If you are preparing to submit your project take your time and make sure it is the best it can be. Don't submit mediocre work.
Studios are on hand for many of these events and get a chance to see the film makers close up. For a film maker, this can be their best shot at getting noticed.
Nearly every country has film festivals, which helps to insure that films from all over the world get shown, and that film makers from all over the world get a chance to be in the spotlight.
In North and Central America, there are dozens of these events and each give a chance for another film maker to be discovered.
Link to Wikipedia on Film Festivals
Home from Film Festivals