This is an ancient festivity that has been much transformed through the years, but which was intended in prehispanic Mexico to celebrate children and the dead. Hence, the best way to describe this Mexican holiday is to say that it is a time when Mexican families remember their dead, and the continuity of life.
Two important things to know about the Mexican Day of the Dead (Día de los Muertos) are:
It is a holiday with a complex history, and therefore its observance varies quite a bit by region and by degree of urbanization.
It is not a morbid occasion, but rather a festive time.
The original celebration can be traced to many Mesoamerican native traditions, such as the festivities held during the Aztec month of Miccailhuitontli, ritually presided by the “Lady of the Dead” (Mictecacihuatl), and dedicated to children and the dead. In the Aztec calendar, this ritual fell roughly at the end of the Gregorian month of July and the beginning of August, but in the postconquest era it was moved by Spanish priests so that it coincided with the Christian holiday of All Hallows Eve (in Spanish: “Día de Todos Santos.”) This was a vain effort to transform the observance from a profane to a Christian celebration. The result is that Mexicans now celebrate the day of the dead during the first two days of November, rather than at the beginning of summer. But remember the dead they still do, and the modern festivity is characterized by the traditional Mexican blend of ancient aboriginal and introduced Christian features.
In homes observant families create an altar and decorate it with items that they believe are beautiful and attractive to the souls of their departed ones. Such items include offerings of flowers and food, but also things that will remind the living of the departed (such as their photographs, a diploma, or an article of clothing), and the things that the dead prized and enjoyed while they lived. This is done to entice the dead and assure that their souls actually return to take part The Day of the Dead can range from being a very important cultural event, with defined social and economic responsibilities for participants (exhibiting the socially equalizing behavior that social anthropologists would call redistributive feasting, e.g. on the island of Janitzio in Michoacan state), to being a religious observance featuring actual worship of the dead (e.g., as in Cuilapan, Oaxaca, an ancient capital of the Zapotec people, who venerated their ancestors and whose descendants do so to this day, an example of many traditional practices that Spanish priests pretend not to notice), to simply being a uniquely Mexican holiday characterized by special foods and confections (the case in all large Mexican cities.)
In general, the more urban the setting within Mexico the less religious and cultural importance is retained by observants, while the more rural and Indian the locality the greater the religious and economic import of the holiday. Because of this, this observance is usually of greater social importance in southern Mexico than in the northern part of the country.