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The Halo of the Sun is the main symbol of the Order - a religious cult of Silent Hill. The symbol first appears in Silent Hill 3 and is featured in one form or another in multiple series installments afterwards. This symbol has been borrowed by Silent Hill's cult from Indian traditions where the red circle represented the light of their main deity - the god of the Sun. With time it was established as a symbol of the religious organization - the Order, though it had numerous changes and significant additions.
There isnt really a canon answer, all we know is that the people that show up there have a lot of guilt in them, and they usually have previous connections with the real silent hill, other than that it's whatever poor fuck gets drawn to the town by whatever weird ghost shit is happening in that particular game.