The word Halloween is short for All Hallow Evening, the evening before All Hallows Day which was on November 1. It dates back to the Celts of Ireland and Great Britain.  It became part of Western culture in the 19th and twentieth centuries.  In the early days, the Irish held dinners and balls and parties for the kids with bobbing for apples and games. Divination games were popular and pranks were also part of the tradition.

Halloween became commercialized in the United States in the early 1900's with postards, decorations, figurines, and costumes.  Trick or treating began in the 1950's.

Today, each year brings bigger commercialization of Halloween. During the 1950's it was primarily kids that wore costumes to school and trick or treating.  Today, adult Halloween parties are increasingly popular and the costumes have become elaborate.

Some additional links for the History of Halloween:

Wikipedia Halloween Facts

Halloween on the Web

Halloween Definitions