The history of the King Cake was brought to New Orleans in 1870 by France.
It's decorated in royal colors of PURPLE which signifies "Justice," GREEN for "Faith," and GOLD for "Power." These colors were chosen to resemble a jeweled crown.
Today, a tiny plastic baby is the common prize. At a party, the King Cake is sliced and served. Each person looks to see if their piece contains the "baby." If so, then that person is named "King" for a day and bound by custom to host the next party and provide the King Cake.