As previous said, Holi lasts for about a week, and it is great fun, the powder is like the powder paint you had at school so dunno if that will affect your wife.
Also as said dont wear anything decent as it will just go in the bin as it will be trashed, on a side note the areas that are celebrating are highlighted in the press the day before so you will have advanced warning.
If there is a way of testing your wifes allergy when you get there or if it is a problem book her into a health shop so she can get pampered and then get yourself into the celebrations as its an experience not to be missed.
Heres some pictures of the last holi in candolim
Also a trick we found out after we got covered was to 1 wear a head scarf and 2 cover your hands and face etc with coconut oil as this helps get the colour off rather than spending days of scrubbing.