It is a Christian celebration and acknowledgement of the birth of Jesus Christ.
As stated above, nobody knows for sure when Jesus was born, or even if he was. Most of the original record was destroyed by natural decay of papyrus, or burning. Most of what we know about what happened 2000 years ago comes from copies, and copies of copies, of the originals. Many of these were subject to error, or editing, depending on the politics of the time, and the attitude of the scribes that did the copying.
It was incorporated into a Roman pagan Winter Celebration, which is where the partying,decorations and gift giving comes from.
Possibly, because of the mix of mysticism, and the nature-centered paganism, there is a distinct secular componant to Christmas.
Lots of non Christians, like me, celebrate it because it is family oriented and fun.