Literally, "Setsubun" refers to the separation between seasons. It takes place on the day before the first day of spring, summer, fall, and winter according to the lunar calendar. However, in modern Japan, the spring Setsubun is by far the most popular.
To purify or exorcise one's home from any evil spirits that may have wandered in, people throw beans (usually roasted soybeans) out the door while shouting Oni wa soto! Fuku wa uchi! This means, "out with the demons, in with luck!" Sometimes a family member or friend will wear a scary mask to represent the oni, or demons, and everyone throws beans at that person instead.
This is particularly exciting at Ikata's nursery schools. The teachers arrange for a visit from some pretty lifelike oni, and the children vacillate between trying to run away and hide from them, and bravely dashing out to throw beans at them. The children also make their own oni masks as crafts.