All Saints Day, was a Christian feast to celebrate the saints. That day was also known as All Hallows (hallowed means holy) and continued the ancient Irish (Celtic) traditions. The evening prior to the day was the time of the most intense activity, both human and supernatural. So, people really celebrated All Hallows Eve as a time of the wandering dead. Some of the supernatural beings were thought to be evil. The people honored those spirits (maybe because they were scared) by setting out gifts of food and drink. Many supernatural creatures became associated with All Hallows. In Ireland fairies were numbered among the legendary creatures who roamed on Halloween.
Basically, All Hallows Eve became Hallow Evening, which became Hallowe'en, which then became Halloween.