What has become many people's favorite holiday is the Eve of the great Christian festival of hope--All Saints' Day. "Hallow" is the old English word "holy." In New Testament Greek the word haggioi, "the holy ones."
translated as "saints" in English is
All Saints is a celebration not of those whose good deeds and exemplary Christian life we celebrate and often call "saints." They are included, of course, but All Saints celebrates what God has done for all of us. "Holiness" is a gift, not an achievement, and it is a gift to all.
All Hallow's Eve (or Even) contracted over time to Hallowe'en. It became a night to ward of the power of evil that attacks and tempts every human being. What better way to spit in the face of evil than to mock it with a costume?
Many believe that Hallowe'en is a direct descendant from the Celtic pagan feast of Samhain. That is true in a sense. Samhain was at this time of year and All Saints' Day was clearly established on November 1 to counter the pagan feast. Yet what happened, as it often happened in Christian history, the pagan feast was not done away with, it was co-opted.
What about "All Souls' Day" (November 2)? As All Saints' Day came to be thought of as a celebration of those the Church called saints because of their exemplary lives, a second feast developed to include "all the faithful departed" (which is the day's title in the calendar of The Episcopal Church). It has become a special day for individual Christians, families and parishes to remember those who have died and entered the nearer presence of God. As such, it tends to be a more sober day than All Saints', although in truth we are celebrating the same thing both days.
Ultimately this is our yearly celebration of the communion that remains between those living at the present time, and all those who have died, expressed beautifully in the beginning of the prayer for the day in The Book of Common Prayer:
Almighty God, you have knit together your elect in one communion and fellowship in the mystical body of your Son Jesus Christ our Lord...
Here's one of the prayers for the day in A New Zealand Prayer Book:
Eternal God, you have always taken men and women of every nation, age and colour and made them saints; like them, transformed, like them, baptised in Jesus name, take us to share your glory.