Reside is a more formal word for live. It usually implies that you live in a place permanently or for a long time. In legal language, the place where you live is called your residence.
He resides with his elderly mother.
She grew up in London, but now resides in Frankfurt.
The word inhabit is usually used for population groups (not individual people) living in a particular area, and it is often used in the passive voice:
The desert is inhabited by nomadic tribes.
That village is mostly inhabited by fishermen.
If an area has no people living in it, then you can describe it as uninhabited.
Diwali is the most celebrated and widely popular festivals in India. This day is considered to be very auspicious among other Hindu festivals and is a way to appreciate the victory of Lord Rama over Ravana, which is termed as a defeat of evil by good. According to Hindu mythology, Lord Rama defeated Ravana to get back his wife Sita, who was kidnapped by Ravana. The festival is also filled with many rituals, customs and celebrations. The festival is so popular that it is celebrated not only in India but also in the whole world.