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Dien Bien Phu was important because it was the battle that resulted in the French giving up and leaving their colony in Indochina. They had been fighting since soon after WWII to try to regain control over their colony, which had been taken from them by Japan during the war. Their opposition was a group called the Viet Minh, which was led by communists.
The US had been supporting France in this war. The US felt that it was important that Vietnam be prevented from falling into communist hands. Therefore, when France left, the US stepped in, becoming the major support for the South Vietnamese (the country was split after the French left) regime. The Vietnam War, of course, was perhaps the most important Cold War conflict and was certainly the most important Cold War-related issue of the mid-to-late 1960s. Dien Bien Phu is significant, then, because it led to the US becoming more involved in the situation that led to the Vietnam War.
What you are referring to here is respectfully known as "The Battle of Dien Bein Phu" or even "The Seige of Dien Bien Phu" by historians. The French Union was fighting the Viet Minh and the battle lasted almost sixty days. One significant point is that Camp Isabelle ignored the cease-fire order. Another significant point is that the Indochina Conference of the Geneva Meeting was already in session during this battle.
Although Dien Bien Phu is little more than a set of mountain valleys, the significance of the battle is well known. Quite simply, it ended the French occupation in Vietnam and directly led to the delineation of North Vietnam and South Vietnam. Of course, 1954 is significantly before the Vietnam War.
Historians often describe the battle further:
[The battle of Điện Biên Phủ is] the first time that a non-European colonial independence movement had evolved through all the stages from guerrilla bands to a conventionally organized and equipped army able to defeat a modern Western occupier in pitched battle.
What it shows is the Viet Minh evolving from guerrilla fighters to an organized army ready to fight a superpower.
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