The glow is called bioluminescence, which is a long word that simply means 'light made by living things'. The creatures responsible are called phytoplankton - microscopic, plant-like organisms that drift in the sea. When they are disturbed by a wave or someone walking through the shallows, they produce a flash of blue light as a kind of alarm signal.
Each individual phytoplankton is far too small to see with the naked eye. But when billions of them are together and all glow at once, the effect is like watching a living light show in the water. Each wave rolling in looks as if it is crackling with blue electricity.
Bioluminescence is found in oceans around the world, but Vaadhoo became famous for its particularly vivid displays. The sheltered lagoon and the warm Indian Ocean temperatures encourage the phytoplankton to gather in huge numbers, making the light especially bright.
Many other sea creatures also make their own light - deep-sea fish, jellyfish, firefly squid, and even some kinds of mushroom glow in the dark. Bioluminescence is one of nature's most surprising tricks, and scientists are still learning from it. Some medical researchers are studying bioluminescent proteins to help track how cells work inside the human body.