This beloved carol, believed to be originally of Welsh origin, had already been around for quite a while when Mozart used it for a piano duet in the 18th century. You can read more about its interesting history in William Studwell's "A Christmas Carol Reader."
Even older than the song is the actual tradition of using holly to ring in the Christmas season. In fact, it may have even been used in Ireland during the time of the winter solstice long before the advent of Christianity. But for many, many centuries now, the Irish have celebrated Christmas and holly has been a part of that celebration.
Here's how it went in the olden days, according to Bridget Haggerty's "An Irish Christmas - Then and Now." In preparation for Christmas the women cleaned the inside of their homes, the men cleaned the outside, and the children's job was to "scout the countryside for appropriate decorations to be cut and brought home on Christmas Eve." Holly, cuileann in Gaelic (pronounced "qwill-un"), was considered one of the best finds because of its colorful berries. After the "gathering of the greens", sprigs of these glossy leaves and clusters of red berries graced mantles, doorways and other places of the Irish home at Christmastime. According to some sources, the plant came to symbolize the Savior: The spiky holly leaves were the crown of thorns and the red berries were drops of blood from Jesus' face and head.
Lucky children in a few particular counties in the south of Ireland might be able to add mistletoe, or drualas (pronounced "dhroo-ah-lus") to their collection of greenery. Mistletoe also had a long-standing role in Celtic culture, symbolizing peace and fertility.
Many Irish emigrants took the tradition of decorating with holly and mistletoe to their new countries, and that may be why many of us hang holly and mistletoe at Christmastime today.