Halloween or All-Hallows Eve, as some may call it, started out as an ancient Celtic festival called Samhain. The Celts celebrated their new year on November 1st which marked the end of summer and the harvest and the beginning of winter. It was a time that was often associated with death. The Celts believed that on the night before New Year the boundary of the worlds between the living and the dead became blurred.
Therefore, on the night of October 31st, they celebrated Samhain, the day ghosts were believed to return to Earth to cause trouble and damage crops. The Celts also thought that the presence of the otherworldly spirits made it easier for the Druids and the Celtic priests to make predictions about the future. For those dependent on the violatile natural worlds, these prophecies were an important source of comfort and direction during the long, dark winter.
To celebrate this event, the Druids built huge sacred bonfires to sacrifice crops and animals to the Celtic deities. During the celebration, the Celts wore costumes made from animal skins and head and attempted to tell each other's fortunes. When the celebration was over, they re-lit their hearth fires, which they had extinguished earlier that evening, from the sacred bonfire to help protect them during the coming winter.
The Romans had conquered most of the Celtic territory by A.D. 43. Within 400 years, two Roman festivals were combined with the Celtic tradition of Samhain. One was called Feralia, a day that the Romans commemorated the passing of the dead. The other was a day to honor Pomona, Roman goddess of fruit and trees. Since the symbol for Pomona was apple, this explains why we practice the game of "bobbing" for apples on Halloween.
In the seventh century, Pope Boniface IV declared November 1st All Saint's Day, a day to honor saints and martyrs. Many believed that the pope was trying to replace the Celtic festival with a related but church-sanctioned holiday known as All-Hallows or All-Hallowmas. The night before was celebrated as All-Hallows Eve and eventually, Halloween.
In A.D. 1000, the church made November 2nd All Souls' Day, a day to honor the dead. It was celebrated similarly to Samhain, with big bonfires, parades, and dressing up in costumes as saints, angels, and devils. Together, the three celebrations, the eve of All Saints', All Saints', and All Souls', were called Hallowmas.
On that note, have a safe and happy Halloween!
*Ancient Origins. Retrived on October 31, 2005 from The History Channel website: http://www.historychannel.com.