Such festivals are important for the release of tension and anxiety. Moreover, children like to be scared a little, and so long as that fear is mild and within a safe context, it is not harmful and may indeed be beneficial.
The problem some Christians seem to have is that this is a pagan festival. But it is only since Britain became Christianised that Hallowe'en has been associated with calling up dark forces. The Celtic name, Samhain, means nothing more than 'summer's end' and fires lit on that day were to drive evil spirits away, not to summon them up. If people knew more about the history of Hallowe'en they would treat it less as a Church-threatening occult festival, and simply as harmless fun.
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