Day of the Dead (Spanish: Día de los Muertos) is a Mexican holiday celebrated throughout Mexico and around the world in other cultures. The holiday focuses on gatherings of family and friends to pray for and remember friends and family members who have died. It is particularly celebrated in Mexico, where it is a national holiday, and all banks are closed. The celebration takes place on November 1 and 2, in connection with the Catholic holidays of All Saints Day and All Soul Day. Traditions connected with the holiday include building private altars honoring the deceased using sugar skull, marigold, and the favorite foods and beverages of the departed and visiting graves with these as gifts. They also leave possessions of the deceased.
Because the chronology of Meso-American history is so muddled, it's unclear as to when and how the use of sugar skulls became popular in the celebration of Dia de los Muertos. What we do know is that it was the result of the cultural merging after the Spanish conquest in the sixteenth century. The use of sugar art (including skulls) in the celebration of All Saint's Day can be traced back to twelfth century Europe.
Following the immigration of nearly 200,000 Spaniards, sugar plantations became one of South America's largest economic resources. Whether it was because the natives were forced into slave labor or a friendly exchange of cultural practices, the history books don't say. But at some point, the making of sugar skulls was introduced to the indigenous people who still remained, not having fallen victim to disease or genocidal slaughter brought on by the Spanish settlers and their armies. Since sugar was abundant and relatively inexpensive, it's logical to conclude that the early Meso-Americans would have found the making of sugar skulls a satisfactory substitute for real skulls, a practice which would have been abolished along with all other native rituals. Over time, the newly defined Catholic rite would completely dominate any other religious notions, with the threat of death as punishment for those who would dare resist.
Jumping forward to modern day, the sugar skull is now an important integral part of the Dia de los Muertos celebration. Just as the use of real skulls was a symbol of life and death to the ancient tribes during their month-long ceremonies, the sugar skull now represents the celebration of life and death as part of the modern-day festivities. Although the Spaniards all but erased the existence of an entire civilization, this one remaining - albeit altered - ritual seems to be the only hinge that still connects modern-day Meso-Americans with their ancient predecessors. The present-day observance of Dia de los Muertos could be seen as a way to honor those dead ancestors as well as immediate family members.