Probably the most common historical reference to Chinese Lion Dance is the story of Nian (年).
A long time ago a strange creature appeared in China and horrified and ate men and animals. The fast and fierce creature was called 'nien' (or 'nian'), which sounds like the Chinese word for 'year'. Neither the fox nor the tiger could fight the 'nien' effectively and in despair the people asked the lion for help. The lion shook his mane, rushed towards the creature and wounded it. The nien hurried away with the tail between its legs. But it announced to return for taking revenge.
A year later the nien did return. This time the lion couldn't help the people. He was too busy with guarding the emperor's gate. So the villagers decided to do the job themselves. Out of bamboo and cloth they produced an image of the lion. Two men crawled inside it and approached the nien. The 'lion' pranced and roared and the monster fled away again. This is the reason why on the eve of the Chinese New Year, lions always dance. They are frightening evil away for yet another year.