This was originally posted as an answer to the question Why is the National Emergency of 1975 seen as one of the most controversial times in the History of India? on Quora.
I’ll begin with your first question, the reasons.
There were two important developments leading up to the 1975 emergency, that can be credited with its imposition .
The first of these, the JP Movement, initiated by students in Bihar and later lead by veteran political leader Jayaprakash Narayan (JP) was targeted against growing misgovernance and corruption under the Congress regime. JP’s call to ‘Total Revolution’ , addressed to his predominantly youth following generated tremendous popular enthusiasm and pushed Indira Gandhi into a corner. The laurels of the 1971 Indo-Pakistan war were far behind her now.
The second, more immediate cause, was a ruling by the Allahabad High Court on 12 June, 1975 that effectively rendered her election to Parliament, null and void. She had been found guilty on 2 out of 14 counts of election malpractices leveled against her by Raj Narain, who had lost the Rae Bareilly seat to her in the said election.
In the days that followed, the pressure to resign began to mount on Indira Gandhi from many quarters, even from within her own party. In an unexpected reaction, she decided to have the President Fakhruddin Ali Ahmed sign and approve an ordinance declaring a state of internal emergency with effect from the midnight of 25 June, 1975.
The answer to your second question, regarding the procedure, is a little more complicated. Back in those days, the Constitutional procedure and requirements for imposing an emergency were very different from what they are now. This is because once the emergency was uplifted and a new government was elected to the Centre in 1977, no time was wasted in amending the very provisions that had made it astonishingly simple for Indira Gandhi to impose and sustain a state of emergency since 1975.  For example,
It is no longer possible to declare an emergency on grounds of ‘internal disturbance’ as it was in 1975. This term was replaced with the much more specific ‘armed rebellion’ by an amendment in 1978.
According to this same amendment, the cabinet’s approval is now required before an emergency can be declared by the President. In 1975, Indira Gandhi acted swiftly to get the President’s approval and chose to inform her cabinet the next morning.
A declaration of emergency was, prior to the 1978 amendment, immune to judicial review. Simply put, such a declaration could not be contested in a court of law!
In 1975, an emergency, once approved by Parliament, could be extended for as long as the cabinet deemed necessary. The 1978 amendment has made it imperative for the Parliament to review its approval periodically, once every six months.
Back then, while approving the declaration or continuity of an emergency, all that was required was a simple majority of the Parliament – which is at least half of the members present and voting. Thousands of the Congress’s political opponents, including many MPs and the chief rival Jayaprakash Narayan, had already been arrested and sent to jail without trial as was allowed under Emergency provisions then. With their opposition missing from Parliament, the Congress found it easy to manage this rather simple majority. Understandably, the 1978 amendment made the terms of Parliamentary approval stricter by replacing the requirement of a simple majority with that of a ‘special’ majority. This requires the approval of at least two-thrids of the members present and voting, as well as at least half of the total strength of the Parliament (which includes members who are not present).
Now coming to your third question, that of upliftment. The exact reasons for why Indira Gandhi finally chose to end twenty months of Emergency rule, remain unknown and hence open to wide speculation. Ramachandra Guha’s book, India After Gandhi, quotes a few possible explanations for this. That she was confident of being elected back to power in the elections that would follow, that she was competing with the Pakistan President who had declared fresh elections in his own state, that she disliked being cut off from public contact following the emergency, and that she was hurt by criticism targeted at her by independent foreign observers who could not be dismissed off as enemies of the state.
 Chapters 21 (The Rivals) and 22 (Autumn of the Matriarch) from Ramachandra Guha’s excellent book, India After Gandhi
 Bihar Movement
 Indian Polity by M. Laxmikanth, for information regarding the Constitution’s Emergency provisions, and also the 44th Amendment Act of 1978.