In honor of the season, the Wall Street Journal on Friday ran a commentary by John Steele Gordon (subscriber link) discussing how Christmas came to be the confusing amalgam of religious and secular celebration that provides such fodder for religious debate at this time of year.
In addition to the oft-repeated reminder that the Gospels describe Jesus’ birth as occurring in spring, and the official date as being chosen to capitalize on Roman/European tradition of having truly debauched celebrations around the time of the winter solstice, Gordon offers a bit of history on medieval and modern Christmas celebrations:
By the high Middle Ages, Christmas was a rowdy, bawdy time, often inside the church as well as outside it. In France, many parishes celebrated the Feast of the Ass, supposedly honoring the donkey that had brought Mary to Bethlehem. Donkeys were brought into the church and the mass ended with priests and parishioners alike making donkey noises. In the so-called Feast of Fools, the lower clergy would elect a “bishop of fools” to temporarily run the diocese and make fun of church ceremonial and discipline. With this sort of thing going on inside the church to celebrate the Nativity, one can easily imagine the drunken and sexual revelries going on outside it to celebrate what was in all but name the Saturnalia.
With the Reformation, Protestants tried to rid the church of practices unknown in its earliest days and get back to Christian roots. Most Protestant sects abolished priestly celibacy (and often the priesthood itself), the cult of the Virgin Mary, relics, confession and . . . Christmas.[...]
It was New York and its early 19th century literary establishment that created the modern American form of the old Saturnalia. It was a much more family—and especially child—centered holiday than the community-wide celebrations of earlier times.
St. Nicolas is the patron saint of New York (the first church built in the city was named for him), and Washington Irving wrote in his “Diedrich Knickerbocker’s History of New York” how Sinterklaes, soon anglicized to Santa Claus, rode through the sky in a horse and wagon and went down chimneys to deliver presents to children.[...]
In the 1860s, the great American cartoonist Thomas Nast set the modern image of Santa Claus as a jolly, bearded fat man in a fur-trimmed cap. (The color red became standard only in the 20th century, thanks to Coca-Cola ads showing Santa Claus that way.)
Merchants began to emphasize Christmas, decorating stores and pushing the idea of Christmas presents for reasons having nothing whatever to do with religion, except, perhaps, the worship of mammon.
With the increased mobility provided by railroads and increasing immigration from Europe, people who celebrated Christmas began settling near those who did not. It was not long before the children of the latter began putting pressure on their parents to celebrate Christmas as well. “The O’Reilly kids down the street are getting presents, why aren’t we?!” is not an argument parents have much defense against.
By the middle of the 19th century, most Protestant churches were, once again, celebrating Christmas as a religious holiday. The reason, again, had more to do with marketing than theology: They were afraid of losing congregants to other Christmas-celebrating denominations.
In 1870, President Ulysses S. Grant signed into law a bill making the secular Christmas a civil holiday because its celebration had become universal in this country. It is now celebrated in countries all over the world, including many where Christians are few, such as Japan.
And, I’ll take this opportunity to wish you a Happy/Merry/Blessed [insert name of your preferred midwinter holiday here]. 
