In the previous parashah of Shelach-Lecha we read that the people would have to remain forty years in the wilderness, because the scouts gave a negative report of the Land of Israel, and the people supported them, and refused to undertake the conquest.
All the generation from twenty to sixty years old, males, with the exception of the tribe of Levi, would have to die in the desert, being a new generation the one that would undertake the conquest.
And it is precisely at this moment of disillusionment that Korah appears on the scene, taking advantage of Moses' moment of weakness, to rebel with forceful arguments, as it is written in the Torah. (Bemidbar 16-1, 2,3)
"...Behold, Korah the son of Yitzhar, the son of Keath, the son of Levi, and Dathan and Abiram, the sons of Eliab and On the son of Peleth, of the sons of Reuben, took a company and stood before Moshe with two hundred and fifty men of the children of Israel, heads of the congregation, and gathered themselves together against Moshe and Aaron, and said to them: Enough, for all the congregation we are holy before G-d why should you set yourselves up as leaders of the people of Israel?"
Why did Moshe set himself up as leader? Why did he appoint his brother Kohen Gadol? Why did he appoint Elizafan Ben Uziel as head of the family of Kehath?
Korach's argument was "...all the members of the people are holy, because we were at Mount Sinai; we all heard the word of G-d, we all lived the revelation therefore we have the same rights...".
If this is so, why do you have to be leaders, and appoint those whom you want to occupy the different positions...?
Moshe Rabbeinu replied to Korach and his followers, "...if you think that I distribute the positions arbitrarily, tomorrow present yourselves at the Tabernacle. Bring a censer and incense, and Aaron will also come with a censer and incense, and let each one light the censer, and the one on whom a heavenly fire falls and consumes the incense will be the one who has the truth...".
Why did Moshe choose the test?
Korach's argument was if we are all holy, we have equal rights, why should one have to set himself above all without any democratic criteria?
Moshe answered him, if we are all equal, and we have the same level of holiness, you are going to light the incense, which could only be done by the Kohen, and if someone else lit it, he would die, and let G-d determine.
Korach and his congregation accepted Moshe's proposal.
The next day when they lit the incense, the earth opened up and swallowed Korach and his family, and the two hundred and fifty men died, because they did not have the spiritual level to light the incense.
So far, the people had been at Mount Sinai, and experienced the revelation of the ten commandments. But how could they know that the rest of the Torah was Divine Revelation, and not Moses' invention?
In the parashah of Yitro we read that all the people lived in first person the revelation of the Ten Commandments. But how do we know that the rest of the Torah is of Divine origin? The episode of Korach ratifies and reaffirms that the rest of the Torah is of Divine origin. For this reason, G-d assented to Moses' demand in order to demonstrate to the people that everything that Moses commanded was according to Divine prescription, and not according to the arbitrary criteria of Moses' own understanding.