What is Halloween? Is it worshipping demons? Is it spirits walking the earth?
The word "Halloween" is derived from a few things; All Saints Day (1st November), Eve of All Hallows (All Hallows Eve) or Hallow Even.
The celebration of Halloween was originally the New Years Eve of the Celts, the eve of Samhain or "Winter's Eve". It was generally believed that the dead or disembodied spirits of all those who had died throughout the preceding year would come back in search of living bodies to possess for the next year. It was believed to be their only hope for the afterlife. All who were alive of course didn't want to be possessed by these lost souls so on the night of October 31st, villagers would extinguish the fires in their homes to make them cold and inhospitable then dress up in ghoulish costumes and parade around the neighborhood making as much noise as possible to frighten away the spirits looking for a live body to possess. Food and drink (which I'd say accounted for the crazy actions of the villages, not the fear of being possessed) would be left out for these costume wielding villages.
In general the whole custom of Halloween was brought to America in the 1840's by the Irish immigrants who were fleeing the country's potato famine. The evil side of Halloween was pushed forward mainly by the church. The church maintained that the gods and goddesses and other spiritual beings of traditional religions were diabolical deceptions and manifestations of the devil. Therefore the customs associated with Halloween were always represented by the church as being evil - ghosts, human skeletons, symbols of the dead, Satan and other creatures such as witches.
It was believed in ninth-century Europe that after you died, your soul remained in limbo. To send the souls up to Heaven the Christians used to go "souling". On 31st October, All Souls Day, they would go around to all the villages and collect "soul cakes" - a cake made out of square pieces of bread with currants. The relatives of the dead would pass the cakes on to the Christians who would promise to pray for their relative which in turn would send them on to heaven. The more cakes given - the more prayers said. This is one custom which was thought that trick-or-treating originated from.
It is also thought that trick-or-treating came from Britain where it was know as "Mischief Night", it is particularly popular in parts of northern England.
It could also of come from old Irish peasant practice in which they would go from door to door to collect money, breadcake, cheese, eggs, butter, nuts, apples, etc., in preparation for the festival of St. Columb Kill.
The Jack-O-lantern came from Irish Folklore. A man named Jack who was a drunkard and known for his quick temper got really drunk at the local Pub on All Hallows Eve. As his life began to slip away from him the Devil appeared to claim his soul. Jack wanted to stay alive and begged the Devil to let him have just one more drink before he died. The Devil agreed. Jack was short of money and asked the Devil if he'd assume the shape of a sixpence so Jack could buy a drink and after that the Devil could change back to himself. I don't know why the Devil is suddenly so stupid, but he agreed to do it (silly Devil). Once the Devil assumed the shape of the coin Jack seized it and shoved it into his wallet which (amazingly) had a cross shaped clip on it. The Devil was now stuck in Jack's wallet. He went crazy - yelling and screaming - ordering Jack to release him at once! Jack did a deal with him (oh yeah, smart move Jack) where he would release him if he agreed not to bother Jack for an entire year. The Devil was so anxious to be released he agreed.
Jack was ecstatic to have escaped the Devil and have a whole new lease on life. Jack mended his ways, for a little while at least. He was good to his wife and children and began attending church and giving to charity. But Jack slowly and surely slipped back to his old ways.
The next All Hallows Eve the Devil appeared to Jack again. He demanded that Jack accompany him to his death. Jack thought he could once again outsmart the Devil and somehow managed to con the incredibly stupid Devil into getting an apple out of a nearby apple tree. Jack even went so far as to hoist the Devil up the apple tree. Once the Devil was up the tree Jack took out a knife and carved a cross into the trunk of the tree - therefore trapping the Devil. The Devil went spare and started demanding to be released and yelling and screaming. He promised Jack that if he was let out of the tree he would give him 10 years of peace. Jack decided that wasn't good enough and demanded that he never be bothered by the Devil again. The Devil agreed and was released from his apple tree trap.
Jack went back to his drunken and angry ways and after almost one year his body gave out and Jack died. He tried to enter Heaven but was refused entry because of his evil ways. He then tried to enter Hell - but the Devil would never forgive Jack for the tricks he played on him. The Devil decided to be helpful for once and threw Jack a coal, he said it was to help him find his way in the dark of limbo. Jack put the piece of coal in a turnip and it became known as a Jack-O-Lantern. It is said that on All Hallows Eve if you look hard enough you can still see Jack's flame burning dimly as he searches through the darkness for a home.
The use of Jack-O-Lanterns as festival lights for Halloween is a custom that descended form the Irish who used carved out turnips or beets as lanterns. On Halloween these lights represented the souls of the dead. When the Irish immigrated to America they found that pumpkins were far more easier to come by than turnips. The Jack-O-Lantern then became a hollowed-out pumpkin lit with a candle.