STORY:

The game's main character is a tiny prince who is tasked with the mission to rebuild the stars, constellations and Moon, which were accidentally destroyed by his father, the King of All Cosmos (the aftereffects of the planet-sized King of All Cosmos’s binge drinking spree that wiped out all the stars and other celestial bodies from the sky). The King (in his never ceasing dissatisfaction) decides to make the Prince go to Earth with a "katamari"—a magical ball that allows anything smaller than it to stick to it and make it grow—and collect enough material for him to recreate the stars and constellations.  Of course, the Prince is successful (though many attempts were needed), and the night sky and cosmos is returned to normal.  Throughout the game you meet many new characters; both playable and not playable.  The largest group of the playable characters are called Cousins (see below). 

There is also a side story that chronicles the Hoshino family and their experiences while the Prince works his magic to recreate the stars. The father is an astronaut and is unable to go to work due to the damage the King caused.  The daughter has special 'senses' and is the only one in the family that can see the Prince's work; she can feel when each constellation returns to the sky. Ultimately, the family, along with their house and town, are rolled up in the katamari that is used to remake the moon (in a completely innocent way of course!).

Takahashi, the game designer said Katamari Damacy was not originally planned to be the Prince's first appearance (he had designed a racing game where the Prince would control a boy steering a go-cart, running over buildings across the world), the game was dropped by Namco but the concept for the Prince stuck.