Halloween is celebrated on the evening of October 31st, which is the evening before the Christian feast of All Saint’s Day. Halloween’s history goes back to the ancient religion of the Celtic tribes (circa 500 B.C.) from whom came the Britons, Scots and the Irish.
The Celts worshipped nature and believed in the spirit world. They worshipped over 300 gods. Their chief god was the sun and they celebrated two festivals revolving around the sun: Beltane, to mark the beginning of summer and Samhain or Saman to mark the start of winter.
The Celts believed that at the end of summer, Samhain, the lord of death becomes powerful and overpowers the sun god. On October 31, Samhain assembles all the evil spirits who had died the previous year and allows them to return home to visit the living.
On October 31, after the harvest, the druids would meet under an oak grove or near large stone circles where they performed sacrifices. Some believe that the Stonehenge in England is one such druid circle. The priests would light great fires and offer sacrifices to Samhain to ensure that the sun returned after the winter.
Villagers would try to appease goblins and demons with offerings of food and nuts. They would leave little treats that the household had to offer, to satisfy the hunger of these demons. If the demon was satisfied with the treat, it was believed it would not trick the person or cast an evil spell. Therein lies the origin of the present day trick or treat.
Legend has it that people would also wear masks or other disguises and blacken their faces to try and pass unnoticed by the spirits. This stemmed from the belief that ghosts or spirits cannot see their own reflection. Hence, if a goblin or demon saw another creature looking suitably horrible, they would run away in terror.
After the Romans conquered Britian in 61 A.D., they brought with them their own harvest festival held on November 1, to honor Pomona, goddess of the fruits of trees. Over the years, the two festivals got mixed up and became one long holiday i.e. HalloWeen
In 834 A.D., Pope Gregory III shifted the festival of All Saints Day, then celebrated on May 13 to November 1. The new day was called All Saints Day or Hallowmas. Thus, the evening and night before it became All Hallow’s eve and later Halloween.
Source: http://www.pitara.com/non-fiction-for-kids/festivals-for-kids/why-is-halloween-celebrated/