Origins:
Due to differences in calendars, it was difficult to determine the actual date of the birth of Jesus and Pope Julius I (337-352) chose the date of 25 December as that of Jesus' birth (Feast of the Nativity). Some believe this day was chosen to aid in converting the pagans, who celebrated Juvenalia (the feast of children) around this time, to the new Christian faith. Many Christian nations still observe 06 January, the Feast of the Ephiphany or Three Kings Day, as the holiday. The Feast of the Nativity spread throughout Europe, North Africa and the Middle East and the Old English term "Cristes Maesse" is first used in 1038.
How Christmas in America came to be:
Christmas was not an official holiday in the United States until 1870. In fact it was banned in Boston from 1659-1681, a by-product of the beliefs of the early pilgrims who found no eveidence of the date of Jesus' birth in the Bible and did not believe in its celebration. This celebration, though, was more akin to today's Mardi Gras with boisterousness and public intoxication than the peaceful, family-oriented holiday we know today. In the late 1600s it was brought back by English leaders. After the American Revolution, English customs, including Christmas, were thrown off.
The early 1800s was a time of tension in America. Many were out of work, there was an expansion of gang violence and class conflict. The first police force in New York City was formed to stop riots as Christmas celebrations had also become increasingly violent!
In 1819, with the nation in this mood, best-selling author Washington Irving, wrote a series of stories about the celebration of Christmas where an English squire invited peasants to his home for the holiday. Irving's ideal was that Christmas should be a time of peace and warmth where people of different classes would come together in celebration. He was intentionally trying to improve on what Christmas had become, to improve its celebration and move it from the streets to the home. A kinder, gentler Christmas.