Sacred holidays in Mid-Winter that celebrate birth and light have been a feature of most civilizations. The Winter Solstice, for example, is one. Throughout Europe, cattle were butchered and wine and beer was first ready for drinking at the end of December. This made it, of course, a logical time to feast.
In Scandinavia, the Norse festival of Yule began on the Winter Solstice, (12/21) and continued through January. A fire was set with a gigantic log to celebrate the return of the Sun after the worst of winter had passed. A feast was held until the log burned out. In Germany, Oden few through the sky to watch his in Mid-Winter. As he did this, he decided who would flourish and who would wither in the year to come.
In Rome, the Saturnalia, a feast in honor of Saturn, God of Agriculture, was held at this time. It began the week before the winter solstice and continued for a month. It was a hedonistic celebration, with food and alcohol in abundance, that turned the usual social order upside down. The poor ruled the city, slaves became masters and everything closed down for the holiday. Romans also celebrated the Juvenalia, a feast for children, at this time and the birthday of Mithra, God of the unconquerable sun, was observed on December 25. Because of this, the day was the most sacred in the year for some.
Christmas began in the Fourth Century when the Church decided to celebrate the birth of Jesus as a holiday. Pope Julius I chose December 25 as the day, probably in an effort to absorb the traditions of Saturnalia. Celebration of the day, first called the Feast of the Nativity, spread throughout the centuries. In the Greek and Russian Orthodox churches, Christmas is celebrated 13 days after the 25th. This is Epiphany or Three Kings Day, the day it is believed that the three wise men found Jesus in the manger.
By the Middle Ages Christmas became a day to go to church, then take part in a drunken festival similar to todays' Mardi gras. A beggar or student was crowned the "Lord of Misrule". The poor demanded the best food and drink the rich had in a sort of trick-or-treat ritual and the more fortunate gave to the less fortunate in general.
Puritans did away with Christmas in 1645 but Charles II soon brought it back. In spite of the change, it wasn't celbrated in America, where Puritans remained. It was actually against the law in Boston from 1659-81! After the Revoloution it returned but wasn't a Federal holiday until 1870.