The Celts believed that on the night before the New Year, the boundary between the worlds of the living and the dead became blurred, and on the night of October 31, they celebrated Samhain, when it was believed that the ghosts of the dead returned to Earth.
In addition to causing trouble and damaging crops, the Celts thought that the presence of the otherworldly spirits made it easier for the Druids to make predictions about the future. For a people entirely dependent on the volatile natural world, these prophecies were an important source of comfort and direction during the long, dark winter.
To commemorate the event, Druids built huge sacred bonfires, where the people gathered to burn crops and animals as sacrifices to the Celtic deities During the celebration, the Celts wore costumes, typically consisting of animal heads and skins, 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.
By AD. 43, Romans had conquered the majority of Celtic territory. In the course of the four hundred years that they ruled the Celtic lands, two Roman festivals, Feralia and Pomona, were combined with the traditional Celtic celebration of Samhain.
Feralia is a day in late October when the Romans commemorated the passing of the dead, while the second was a day to honour Pomona, the Roman goddess of fruit and trees (origin of Apple Bobbing?)
By the early 800s, the influence of Christianity had spread into Celtic lands. In the seventh century, Pope Boniface IV designated November 1 All Saints' Day, a time to honour saints and martyrs. It is widely believed today that the pope was attempting to replace the Celtic festival of the dead with a related, but church-sanctioned holiday. The celebration was also called All-hallows or All-hallowmas (from Middle English Alholowmesse meaning All Saints' Day) and the night before it, the night of Samhain, began to be called All-hallows Eve and, eventually, Halloween.
Halloween is a date of astronomical interest as well. October 31st is a cross-quarter date, which is approximately midway between an equinox and a solstice. There are four cross-quarter dates throughout the year, and each is a holiday: Groundhog Day (The US Only, Feb. 2nd), May Day (May 1st), Harvest Day (US Lammas, Aug. 1st), and Halloween (Oct. 31st).