The word Christmas comes from the words Cristes maesse, or "Christ's Mass." Christmas is the celebration of the birth of Jesus for members of the Christian religion. Most historians peg the first celebration of Christmas to Rome in 336 A.D.
Christmas is both a holiday and a holy day. In America it is one of the biggest event of the year (especially for kids), and for members of the Christian religions it is an important day on the religious calendar.
The tradition of gifts seems to have started with the gifts that the wise men (the Magi) brought to Jesus. As recounted in the Bible's book of Matthew, "On coming to the house they saw the child with his mother Mary, and they bowed down and worshipped him. Then they opened their treasures and presented him with gifts of gold and of incense and of myrrh."
As mentioned in the previous question, however, no one was really in the habit of exchanging elaborate gifts until late in the 1800s. The Santa Claus story (described later), combined with an amazing retailing phenomenon that has grown since the turn of the century, has made gift giving a central focus of the Christmas tradition.
...especially when combined with the word "sale"? According to the book Did you ever Wonder... by Jeff Rovin, the word for Christ in Greek is Xristos. The use of the shortened form "Xmas" became popular in Europe in the 1500s. The word Xmas is so common in advertising most likely because "Xmas" and "sale" have the same number of letters, and "Xmas" is significantly shorter than Christmas.
Christmas Eve is a big deal for religious reasons, such as the midnight mass, and also for retail reasons. 1867 was the first year that Macy's department store in New York City remained open until midnight.
According to a very old tradition, the original Saint Nicholas (see the section on Santa) left his very first gifts of gold coins in the stockings of three poor girls who needed the money for their wedding dowries. The girls had hung their stockings by the fire to dry.It was traditional to receive small items like fruit, nuts and candy in your stocking, but these have been replaced in the last half-century by more expensive gifts in many homes.