The green knight arrives at the castle looking for the leader of the crowd.
"I have come searching for someone to accept my challenge. The challenge is someone strikes me with an axe and I shall return the blow in a year and a days time." Gawain then takes Arthur's place and accepts the challenge.
The green knight rode off with his severed head after Sir Gawain cut it right off.
Sir Gawain heads off on his journey to the green chapel to fulfill his word and meet the green knight. When he stumbles upon another castle.
He stays for three nights returning everything he is given except for the third in which he keeps the sash he is given by the queen.
The green knight strikes three times representing each night that Gawain had stayed at his castle. The first two do not strike Gawain because he was honest. The third he lied and took the sash and was cut only slightly.