The dwarf and the 5th incarnation of Vishnu – Vishnu’s feat of traversing the Universe with his 3 steps is explicitly alluded to Rig Vedă.
Bali, the great-grandson of Hiranyakashipu , was a virtuous and a just monarch. His rule was so successful that his reputation began to overshadow that of Indra who was obliged to seek Vishnu’s help to regain his supremacy. Also an asura could not be allowed to rule the Devaloka. So not wishing to use harsh measures against such an exemplary ruler, Vishnu resorted to a strategem. He disguised himself as a dwarf and asked Bali to give him piece of land 3 paces wide on which he could sit and meditate. Pleased to be able to encourage piety, Bali granted the request. Vishnu then used his supernatural powers to take possession of heaven and earth in 2 steps, thus depriving Bali of his kingdom. Stunned, Bali offered his own head for the 3rd step to be completed. In recognition of Bali’s generosity and benevolent rule, Vishnu refrained from taking his 3rd step and gaining the underworld as well but installed Bali as its monarch.
The three steps are regarded as holding up elements of the Universe ; all creatures dwell within them and their extent symbolizes Vishnu’s power to cover the universe.