Vaidyanath jyotirling is located in the deoghar district of Jharkhand and is one of the most important twelve jyotirling which are dedicated to bhagwan shiva. This temple is very divine and is of extreme importance in the Hindu mythology as it is associated with one of the most famous stories of all kind.
As per the mythological records, in the period of treta yug when ravana was still a normal practicing Brahman decided to please lord shiva and chose a place to offer his prayers and havan but bhagwan shiva was not pleases very easily, his urge to please the lord went on for the decades but still there was no sign of the lord finally out of frustration when no way was left ravana to show his full devotion to bhagwan shiva offered his ten heads one by one in the havan kund, seeing this lord shiva finally appeared and to save his bhakt reemerged his heads back to their places and granted boon to ravana of being unbeatable in the world, the gesture of bhagwan shiva of stitching back the heads of his devotee earned him the name of Vaidyanath which means none other than a doctor who is addressed as a vaidya in Sanskrit.
One more story which is associated with the jyotirling is that after the boon ravana gone mad in his power and decided to take the kailash parwat the home of lord shiva in lanka and when he started lifting the mount shiva placed his little finger on the ground and ravana was stuck under the mountain and worshiped for decades to please Mahadev to seek forgiveness. Finally, shiva appeared and granted him a jyotirling which he can place in lanka but reminded him of one condition that the jyotirling must not touch the ground as if it, then that place will be known by its name for eternity.
On his way to lanka ravana was making sure that the jyotirling must not touch the ground but the devas knew that this will only increase the demon lords power, so they called upon varun dev the god of water and he created little problem inside ravana stomach which forced him to stop by and get relieved. In order to not let the jyotirling touch the ground he gave it to a man passing by for a little time and when he came back he saw the jyotirling is placed on the ground, the man was none other than Lord vishnu who tricked him, learning this ravana became mad with and offered his ten heads once again to lord shiva as penance and shiva forgiven his greatest devotee.
The place where the jyotirling was placed is known today by the name of Vaidyanath Jyotirling
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