Drew Carey says: I'll bet living in a nudist colony takes all the fun out of Halloween.
Absolutely, because fantasy and imagination inspire children. That is an important part of being able to dress up like their favorite hero or princess. There are many reasons for Halloween. It is has been around since I was a child (65 years).
In the United States, 31 October has become a major celebration that appeals to adults as well as children, as shown by the elaborate homemade and store-bought decorations people use to decorate their homes, and also by the adult street festivals, masquerades, and parties found all over the United States
It is the only time that most children get to wear a costume. The candy is a part of it. But it is not the main part. As lentzk pointed out, choosing that perfect costume is so much fun.
It would be fun to look back through Halloween costume history and see who was in vogue and when. Probably, that would be a good way to find out a lot about our culture.
When I was a girl in the 1950s and 1960s, costumes were really homemade. A person might be a witch, a pirate, a robber, a cowboy/girl, ghost, or something that in today's society is considered "passe."
When my daughter was growing up in the 1970s and 80s, here is her list of all homemade costumes: witch, mouse, mummy, skeleton, werewolf, monster, member of the Kiss band, and when she was a senior in highschool she dressed up like a baby with a diaper, little baby hat, booties, a gigantic pacifier, a huge baby bottle, and a bib. She would the outstanding prize for best costume.
Granddaughter in the 2000s (again all homemade by me)=lady bug, bumblebee, mummy, skeleton, werewolf, geisha girl, zombie bride, American Indian, and we are working on this year's costume now.
A lot of time spent together planning, designing, going to Goodwill, and having fun together.
Part of the thrill of Halloween for youngsters like my twins, who are five years old, is the act of choosing the perfect costume. They started pondering this great dilemma probably back in February. Children (and adults, too!) simply adore the idea of pretending to be someone else. Wearing a costume can be extremely liberating; dressing up offers children the chance to explore different behaviors, to be bolder, sillier, or feel braver than they might normally as their regular old self. My shy little daughter would usually be far too reticent to go up to complete strangers and demand candy. But dress her up in a horse costume? She boldly galloped to every single neighbor's house for trick-or-treating!
Sure, there are historical reasons. Those are not really that relevant though. People dress up on Halloween because everyone else does. It is a holiday pressured by the candy companies. Now decorations are also a big thing. I heard that Halloween outsells Christmas, decoration-wise. It is a good way to get everyone in the community involved though.
Traditionally, the act of "guising" dates back to the 1400s, and Scotland was first to popularize it in the late 1890s. Halloween costumes didn't catch on in the U.S. until after 1911, when it was first reported in Canada, but the main idea of masquerading was usually meant as a way of receiving gifts--treats. The costumes are always meant as a way for a trick-or-treater to appear in disguise, and the anonymity probably appeals to both adults and children. Historically, early costumes usually represented "the pagan and gothic nature of Halloween," (Wikipedia) and todays popular supernatural, sci-fi and cultural themes seem like a normal prorgession.
I believe that this goes back to the time of the pagan Druids and such in old Europe. They celebrated a holiday called Samhain (at least it was called that in Gaelic) around the time that we now have Halloween. It was believed that the curtain between the world of mortals and the world of spirits was very thin on that night. It was believed to be easy to cross between the realms.
I believe that this is where the tradition of dressing up comes from. I believe it comes from the idea that this is a particularly “spooky” time of year. This passed to us through the Christian All Saints’ or All Hallows’ day.