Christmas clearly has its roots in the pagan festivals of Saturnalia and Yule.
December 25th is obviously NOT the birthday of Jesus. The pagans had already been celebrating Saturnalia (December 17th through December 23rd), a festival honoring the birth of Saturn. Arelius began to incorporate the honoring of the birth of the Roman Sun god, Sol Invictus, on December 25th at around the 2nd century in the hopes of bringing a pagan revival to the Roman Empire. During the Saturnalia & Sol Invictus festivals, there was drinking, feasting, dancing, orgies, robbery, murder, and revelry that filled the streets. Roman courts even closed for the Saturnalia celebration, seeing that Saturn was the god of excess and hedonistic pleasures. As time passed, the two festivals combined. During these times Christians were often persecuted by the revelers. The wealthy would select a slave (typically a Christian), or a prisoner, and give them gifts, food, drink, and allow them to "live it up" during the festival. Then, on the last day of the festival they would violently murder the "guest" as a sacrifice to Saturn.
To the North, the Norse who worshipped Odin, Thor, Loki, and the like also had a festival on December 20th called Yule. The Norse feared the nearing winter. Winter was a time of short days, darkness, and great hardship that brought sickness, freezing cold, and death to so many. As a result, they would slaughter livestock (who wouldn't survive the winter) and bring in the last of the harvest and have their Yule feast on December 20th, which marked the shortest day and the longest night of the year.
All of these pagan traditions blended together in Europe to form the Yultide & Saturnalia holidays. As the Catholic church gained power in Europe they began trying to convert the pagan peoples to Christianity. While many of these pagans converted, they were still fond of their festivals and revelry. So the church tried to give them something "Christian" to focus upon. Since the exact birth date of Christ is unknown, the church decided to establish Christ-Mass (a mass honoring Christ's birth) on December 25th all the way through January 6th. Their hopes were that the pagan peoples would slowly turn from their ways and focus on a more "Christian" festival. Church services, dramas, and the telling of the Bible story of Christ's birth became a part of the "Christian" tradition.
But the people didn't give up their revelry. It was so bad that the Catholic church began offering indulgences for sin during this time of year and so even the "Christians" were participating in the drunken revelries, violence, orgies, and the like with total abandon... only to turn and seek forgiveness during the Christian celebration that became known as "Christmas". The revelry and chaos was so bad, that after the Protestant Reformation, a number of Protestant countries rose up to condemn and even outlaw "Christmas". In most cases, the general population of these nations were upset that their holiday of drunken revelry was prohibited and so counter movements (especially among Catholics) started. Even in the United States, the celebration of Christmas was prohibited during the first 50 years of our history. But as more and more immigrants entered the United States, Christmas revelries began to spread throughout our country. The revelries were so terrible. They were filled with debauchery, sexual license, drunkenness, and even arson. Groups of half naked drunks would gather outside houses and sing songs demanding more drink, food, and other items. If the home owner didn't provide these things, the drunken "carolers" would throw rocks and bricks through windows or even set the house on fire. All attempts to legally prohibit the celebration failed. Entire communities were helpless. While, by now all the associations to the pagan gods were forgotten, Christmas was a nightmare with some Christians participating in the revelry, while others sought to ride out the chaos by barricading themselves in their homes. Something had to change.
Capitalism to the rescue. Yep, Capitalism. The feast of St. Nicholas was celebrated on December 6th. It was a time of festive eating and gift giving, especially to children and the poor. In Europe the St. Nicholas tradition had already taken hold among the Dutch and so the holiday was more "family" oriented. Marketers in the United States seized this opportunity... they would use St. Nicholas to market the gift giving tradition in the United States. By doing so, they'd generate revenue and boost the sales of department stores. But they needed a gimmick, a "face" and St. Nicholas was perfect. The Dutch pronunciation of St. Nicholas was "Sinterklauss". This was Americanized to "Santa Claus". Only now, they needed an image. Coca-Cola was the company that eventually sold the familiar image of "Santa Claus" to the American public and it was embraced. Now, instead of St. Nicholas being a deeply religious Catholic Saint who rewarded good Catholic children, he became Santa - a jolly man who brought presents to every good American boy and girl. A New York author, professor, and clergymen soon wrote a short story that has become known as, "The Night Before Christmas". The story spread like wildfire. The family oriented Dutch version of Christmas was being marketed, advertized, and Americanized and the American public ate it up. And so, as time passed, "Christmas" in America evolved into a family oriented, rather secular, holiday. The marketing and emotional appeals with sentimental stories, movies, and Christmas cards tamed the revelry into being a side note. Now "Christmas" was reformed and family friend, a capitalist's dream come true.
Still many of our "traditions" are rooted in the earlier pagan customs. The use of the "Christmas tree", Yule log, wreaths, mistletoe, holly, stories of elves, etc. originated in the pagan customs of the Norse, Romans, Germanic, and Dutch peoples. For those who are decendants of these peoples, some of these "traditions" are still rather dear. But they do not hold the pagan associations that they once did today. Today, they are largely seen as cultural decorations and traditions for the winter Christmas season.
As it relates to Christians... well, soon the general population of America began to expect their churches to pick up on the Catholic tradition of honoring Christ's birth during this season. And so, Protestant churches (who originally opposed Christmas) began caving-in and started providing "Christmas services", pageants, concerts, candle light services, Nativities, etc. This was to satisfy the spiritual desires of those who increasingly participated in the new Americanized "Christmas". This added an element of their faith into the cultural Christmas celebration that was largely secular. And so for American Christians, Christmas is a blending of ancient pagan traditions, secular marketing, family sentiment, and religious devotion.
Some Christians still refuse to celebrate Christmas. It isn't biblical. Nor is even remotely close to the actual time of Christ's actual birth, which is truly unknown, but most scholars tend to lean towards it being in the fall. Some Christians eargerly look forward to Christmas, feeling that overwriting a pagan holiday by honoring Christ's birth and our American cultural traditions is a fitting victory over paganism and revelry. Whatever one's convictions on the matter, I think we can all agree that we'd never want to see "Christmas" become what it once was. Many Christians feel that participation helps keep the more family friendly, and faith oriented, Americanized, traditions of Christmas alive and thereby protects Christmas from devolving into the drunken revelry it once was.
So, if you wish to abstain from the Christmas celebration, you have good reason. May God richly bless you and keep you.
And if you wish to participate in the Christmas tradition, you too have good reason. May God richly bless you and keep you.
Just remember, in all you do, love one another. And if you participate, or if you abstain, do so to the glory of God.
As it relates to holidays, special festivals, cultural observances, and the like, I remember the words of Paul....
Romans 14:5-8 English Standard Version (ESV)
5 One person esteems one day as better than another, while another esteems all days alike. Each one should be fully convinced in his own mind. 6 The one who observes the day, observes it in honor of the Lord. The one who eats, eats in honor of the Lord, since he gives thanks to God, while the one who abstains, abstains in honor of the Lord and gives thanks to God. 7 For none of us lives to himself, and none of us dies to himself. 8 For if we live, we live to the Lord, and if we die, we die to the Lord. So then, whether we live or whether we die, we are the Lord's.