During the time of the eastern and western Roman empires, people began to celebrate the birth of baby Jesus, which we would later know as Christmas. It is thought that December 25 was chosen as the date for this celebration due to it's place as the winter solstice on the Roman Calendar. The way that they actually celebrated is still much a mystery to us.
The middle ages is where the modern idea of "Christmas" really begins to take form. Christmas wasn't a super popular holiday for several hundread years until Charlemagne was crowned on Christmas day. After this, people began to celebrate the holiday more and more. This is also around the time where we would begin to see people give gifts, the introduction of plants such as ivy and holly, and generally large celebrations of meals, performances, and games.
During the 17th and 18th centuries, Christmas ran into some roadblocks. These notably come in the form of the puritan church being anti-Christmas due to its association with drunkenness and poor behavior. It eventually got through these tough times, though. In the 19th century, Christmas was also upholstered by one Charles Dickens due to his novel A Christmas Carol which was the modern catalyst for the modern Christmas spirit. In the 20th century, Christmas began to become even more popular, but it was also banned in several places. These places include the Soviet Union and Nazi Germany, two places not exactly known for the best freedoms. With both of those being nonexistant now, though, most of the people of Europe and the Americas are free to celebrate the holiday that we all know as the happiest time of year.