According to Hindu mythology Lord Brahma is consider to be the maker of universe, in the wake of making universe he chose to experiment with one of his of his creation (a creature which was later on named as Vastu Purusha). This creation expanded extremely quick and nearly covered whole earth, and ate everything that came in his way.
Lord Shiva Vishnu requested that Brahma should do something before everything was wrecked by this Creature. Brahma understood his mistake and called the Astha Dikapalakas, the Gods of the eight cardinal directions. Together they overpowered the Great Beast and held it flat against the earth. At that point Brahma jumped in the center and held the beast down. With 40 other gods this beast was nailed down to earth. All of these gods show up in the great Vastu Mandala (a diagram portraying the positions of the gods in different directions when they held this beast) this was named as Vastu Grid.
The fire God got SouthEast position, the water God got NorthEast, and so on. According to the positioning of the gods got fixed so did the different activities in the building or any other construction.
Modern Theory about this mythical story is that most people in India were illiterate is the past. Vastu has a relevant scientific explanation and should be practiced for maintaining a balance in Mother Nature. It is an ancient Indian science of architecture and structures to help create a pleasant environment or a most scientific place to live and work, taking advantage of the benefits bestowed by nature, its elements and its energy zones for enhanced wealth, health prosperity and happiness. In addition, Vastu Shastra unifies art, science and astronomy and is an ancient mystic method of design and constructing. It is a science of direction that combines all the five elements called "Paanchbhootas" of nature and balances them with man and materials. It is all about the effects of these elements on a living person and how we take advantage of the benefits bestowed by nature, its elements and energy fields for enhanced wealth, health, prosperity, and business. Our sages have known the secrets of using all the five elements of this universe and their influences such as the magnetic fields, gravitational force, ultra-violent rays, and the infra-red rays.
There is a correlation between the rotational force of the planets and the house/factory/office/shop design and their different directions with respect to the east, west, north, and south. If any construction is made according to the principals of Vastu Shastra, the occupants are much better off physically, financially and mentally than those living in constructions not built as per Vastu norms.
You will be astounded to take note that even today the people of South India adhere to the guidelines of the Vastu Shastra and are more tranquil and materialistically and financially more prosperous than North India.
The Vastu Shastra is established upon the laws of nature. The balance, we see in nature is effectively perceivable by us in every moving body, yet lamentably we can't take note of this balance in static bodies. So also, when a structure is developed without watching the standards of Vastu Shastra, different calamities, diseases, and mishaps are likely to happen. This is the unceasing principle of nature and it has no place for any logic, doubt or debate.