It was believed that Halloween was the gathering time for unsanctified spirits. During the Middle Ages grew up the belief in a cult of witches devoted to the worship of Satan.
They would held periodic meetings, called Witches Sabbaths; the most important of which was All Hallows' Eve. At this Sabbath the Prince of Darkness would appear, to mock the coming feast of the saints. The popular thought was that the witches would hold orgies at these Sabbaths; and that they would be accompanied by their black cats, and that they would fly them on broomsticks. More information is to be found on the Witches section.
Some historians have mentioned the reference to a Celtic Gods of the dead. But there is no evidence of any correlation to Gwynn ap Nudd (British), Arawn (Welsh) and even Lug (Gaul). Moreover the Celtic "Lord of the Underworld" has nothing to do with the Judeo/Christian/Islamic dualistic concept of Satan.
In the same way, ghosts, spirits and witches have been since regarded as evil. The Celts did not have demons and devils in their belief system. The fairies, however, were often considered hostile and dangerous to humans because they were seen as being resentful of men taking over their lands. On this night, they would sometimes trick humans into becoming lost in the fairy mounds, where they would be trapped forever. After the coming of the Christians to the Celtic lands, certain of the folk saw the fairies as those angels who had sided neither with God or with Lucifer in their dispute, and thus, were condemned to walk the earth until judgment.
More about witches Sabbaths