Excerpt from Govt Gazatte “The town of Lonar is, for instance, believed to have been founded in the Kritayuga, thousands of years ago. According to the Skandapurana, the giant Lavanasura lived in a subterranean abode from which he issued to devastate the surrounding country, even aspiring to wage war against the gods themselves. They becoming alarmed, petitioned Vishnu to destroy him and he, assuming the form of a beautiful youth—Daityasudana— and having won by his beauty the assistance of the giant’s two sisters, discovered his abode. With a touch of his toe he is said to have unearthed the giant, and having overcome him in a single combat, buried him in the pit which was his home. The present lake at Lonar is said to be the den of the giant, and a conical hill near the village Datephal, some 36 miles to the south-west, is said to be the lid of the giant’s den which Vishnu covered with his toe. The water of the lake is supposed to be the blood and the salt which it contains, the decomposed flesh of the giant. A similar legend is told about the town Mehkar also in this district. It is said that many thousand years ago there lived a demon named Meghankara, who, like Lavanasura, threatened even the gods. Vishnu, appearing in the form of Sharangadhara, put the demon to death and the present town of Mehkar is the scene of the fight. [Buldana District Gazetteer (Old ed.), p. 435.] Both these legends are evidently without any historical basis and were plainly concocted in the Puranas to account for the place-names Lonar and Mehkar. There are indeed old temples at both these places, but they are of the mediaeval age.
However, the Lonara Mahatmya has a different version to give. It states that the sage Kashyapa among the seven sages married eighteen wives, of whom were born gods, daityas, etc. Lonasura was the son born to one of his wives. He was the first daitya. In place of the present Lonar was a mountain where Lonasura engrossed himself in appeasing Mahadeva by prayers. Pleased by his tapatsya Mahadeva presenting himself in front of Lonasura asked him for a boon or vara. When Lonasura was just asking Mahadeva to bless him with immortality, the thirty-three crores of gods uttered in one voice that a boy of five years would kill Lonasura. On hearing this, Mahadeva retired to Kailasa, his permanent abode. Lonasura afterwards won all the three worlds and set himself on Indra’s throne.
ref : http://cultural.maharashtra.gov.in/english/gazetteer/BULDHANA/his_ancient%20period.html