Occasion means something special––that happens seldom or is notable when it does. On occasion, we sit down together as a family, but not every day, and never for dinner. When Great Aunt Mabel visits, however, we rise to the occasion and stage a large family meal.
Occasion can also mean a designated time or reason something happens, or it can be an event in itself. I'm giving you your grandmother's ring on the occasion of your graduation from high school. I haven't had occasion to look at it since she died. It's valuable, so only wear it on special occasions.