As Muslims we should not be celebrating Halloween at all because of the religious/spiritual (fortune telling/mystical) history of this event, and the fact that it would be Bid'ah for us. However, other people of faith, including Christians, should also take a look at the history of Halloween and decide on their own whether or not they want to celebrate it. and besides it's savage history, halloween has been infamously known for being a really dangerous day in the year when many people get injured, die and hurt others - including children. Here is an article on the history of Halloween.
History of Halloween – Its Origins
Historically, the practice of Halloween can be traced back several 100 years before the birth of Christ. The Celts were a pre-Christian culture that was served by priests and druids. We learn about them through the Greek writers and the Roman Caesars. Early record of them has also been found in Ireland. In 47 BC the Romans defeated the Celts and outlawed their human sacrifice.
Many trace Halloween's origins to a festival of death, darkness, demons, superstitions, and worshipping the dead celebrated by the Celtic Druids of England. This group worshipped the sun god and built bonfires. "Bon" means good so these were meant to be "good fires" to appease the sun god so that the sun would come back again. Human sacrifice was made on these "good fires" and it was done at the end of the year when the days began to grow short and the sun shines less.
During his reign, Pope Gregory the Great incorporated the Druid festivals into the church. He decreed that they could no longer sacrifice to the devil but they could kill for food and give thanks to God. In the pagan calendar, October 31st was a festival honoring the sun god or the lord of the dead. It was celebrated with fire and was associated with darkness, death, and demon spirits. November 1st was the Celtic New Year.
However, in order to appease the Celts and incorporate them into the Church, Pope Gregory adopted the Celtic calendar in the 700's. He named November 1 as "All Saints Day" or "All Hallows day" with a specific purpose. It was set aside as a time of offering prayers for the dead something that is expressly against biblical truth. The focus was on the "saints" or the martyrs of the church and they were to be prayed for and to be commemorated on that day. October 31 then became "All Hallows Eve" which over time was shortened to "Halloween."
Note: The fact is that men have taken pagan customs and give them Christian trappings does not make them biblical. They become part of the traditions and the practices of men and the fact that they take place in church seems to lend legitimacy to them, but nothing could be further from the truth.
History of Halloween – The Early American Days
The Pilgrim forefathers who came to this country forbade Halloween and its practice because they knew of the source and history of this day. However, in 1840 the great potato famine in Ireland brought floods of immigrants into the United States and they brought their Roman and Celtic customs, superstitions, and practices with them. By the 1900 the practice of celebrating Halloween was wide spread.
History of Halloween – Today
What should a parent do? Should a parent forbid their children from celebrating the safe aspects of Halloween? The celebration of Halloween has become somewhat "benign" in our modern culture -- a time for children to go trick-or-treating and a time to have costume parties. We encourage parents to carefully consider the events and provide safe activities for their children.
One thing is certain. Avoid all evil aspects of the holiday. The practice of occult offerings is alive and well in many places including England and America. There may not be human sacrifices, but every year at Halloween people are warned to keep their cats under safe lock and key, especially black ones. Each year, there are several news stories of authorities finding the remains of these evil ritualistic "celebrations." There are ashes from the fires and the mutilated remains of animals. Of course, it is done in secret now but these people are becoming more and more emboldened in what they do. History is repeating itself.