The official reason for this particular Winter celebration is completely different than Christmas. Whereas Christmas is, among a very modernized and high-bullshit attempt to get rid of various Pagan festivities, namely Saturnalia, a celebration of the birth of Jesus Christ (regardless of when it actually happened, and it certainly wasn't on Saturnalia), Hanukah celebrates a mytho-historical battle in which the pacifist Hebrews, captured by the persecuters (as are all-too-common in Jewish mytho-history, as well as the Real World), were trying to defend themselves, and ran short on lamp oil. Somehow a single day's supply lasted for eight; the dreidel, a toy played with on Hanukah (though I haven't touched one in years), was a trick the Hebrews who were captured used to discuss plans with guards watching under the guise of the game, has thus become a game kids actually play (for chocolate coins) where it has been inscribed with a Hebrew acronym for "A great miracle happened here." The miracle being the whole eight-day oil thing. Lots of candles and presents, too.
I think the only reason Jews almost always celebrate Hanukah and not as often the other similar holidays (such as Purim, which is basically the same story as the Hanukah story except that the Jews actually fought back and there wasn't any supposed miracle) is because it happens to coincide with Christmas, and gives Jewish kids their own chance to cash in on over-commercialized Saturnalia fun under a typical Judeo-Christian guise of celebration of some pivotal miracle.
The Story of Hanukah
In 167 BCE the Greeks, led by Antiochus, issued decrees forbidding Jewish religious practice. They tried to eradicate the Jewish religion by killing all who showed any reluctance in worshiping the Greek gods. They forced the Jews to sacrifice unclean animals (pigs, for example) on their altars, and they desecrated copies of the Torah and any other symbols of Judaism.
Some Jews fled into the wilderness, led by the Chasidim. They mounted a campaign of guerrilla warfare. Somehow, after many battles, they finally managed to push back the Greeks. A turning point in the war was when the Jewish leader Mattathias decided that it was okay for the Jews to defend themselves on the Sabbath. This was a very religious war.
When the Jews, led by Mattathias' son Judah Maccabee, finally retook Jerusalem, they cleaned out the temple and lit the menorah. (This was The Menorah, designed as dictated in Exodus 25:31-40) But there was only one undesecrated cruse of oil, enough to last for one day. It would take eight days for the priest to prepare more oil that was untouched by pagan hands.
The one cruse lasted eight days. This was clearly a miracle, and is the reason for Hanukah.
The Celebration of Hanukah
Hanukah starts on the 25th day of Kislev of the Hebrew calendar. This floats around on the Gregorian calendar, falling sometime in November or Decenber. Hanukah lasts for eight days during which lamentation for the dead and fasting are forbidden. Other than that life goes on as normal during Hanukah, aside from the lighting of candles and general celebratory atmosphere. It is not usual to take off from work during Hanukah.
The primary religious tradition of Hanukah is the lighting of the menorah, AKA the hanukiah. The candles are lit at sundown and left to burn for at least half an hour, and usually left until they burn out on their own. The menorah should be placed so that the light of the candles can be seen by neighbors and passersby.
There are also some traditional foods eaten at Hanukah -- latkes (potato pancakes), apple sauce, beef brisket, and jelly donuts (sufganiyah) for desserts and snacks.
It is traditional to play with a dreidel (sevivon), a spinning top that is used as a type of four-sided die in a simple gambling game. It is also common to give small gifts, especially to children, during Hanukah. This tradition is becoming even more popular as Hanukah tries to become a stand-in for Christmas.
Because the 'real' name for Hanukah is written in Hebrew there are many ways to translate it into English. Other common English spellings include Hanukkah and Chanukkah. It is also known as the Festival of Lights.
First off, there is pretty good documentary evidence that this festival refers to the Jewish rededication of the Temple in 164 B.C.E., following a military victory over Antiochus IV Epiphanes, who had had the Temple descrated three years before. The military campaign was lead by Judah Maccabi, or Judah the Hammer, the third of the five sons of Mattathias, who began the revolt, and mostly consisted of guerrilla warfare. The Jewish troops were greatly outnumbered and outarmed, but succeeded in regaining their independence anyway, even though in reality, it wasn't just a war of insurrection but a civil war, as "collaborators" were treated just as harshly as Syrian soldiers.
To fully grasp the origins of the war, you must be aware that not only was there opposition to a general gradual helenization of the country, but that Antiochus made the tensions greater by forbidding the practice of Jewish religion, forbidding circumcision, the observance of Shabbat and the traditional holidays, and the reading of the Torah. He specifically gave orders to have his troops search for and burn copies of the Torah. As the culmination of this policy of religious and political oppression, Antiochus invaded Jerusalem in 168 B.C.E. and desecrated the Temple. A year later he dedicated the altar to Zeus. Though many Jews under the leadership of Jason, the High Priest, had been conforming to the new laws, this final act set the populace against Antiochus and gave a great deal of support to those who already begun to oppose his rule, the Hasideans and Mattathias and his sons.
Small digression: There were no Chasidim as we know them in 164 B.C.E. There was a Jewish sect with the same name in Hebrew, who are now usually referred to as Hasideans. They indeed were very religiously observant and supposedly preferred martyrdom to breaking the sabbath. And as correctly stated above, their support of Mattathias and Judah Maccabi as well as their decision to fight even on Shabbat turned the tide in the war. This group might have influenced the Essenes and might even be connected to the people referred to as Chasidim in the Talmud. But there is no evidence linking them to what is now called Chasidism. Modern Chasidism distinctly traces itself from the Baal Shem Tov, a man with the given name of Israel ben Eliezer who was born in eastern Poland around 1700 C.E.
Even though at times it seems as if the main emphasis of the holiday were this victory, the actual festival commemorates the miracle that occurred during the reconsecration of the Temple. One of the features of the Temple was a menorah that was to always be kept burning continuously as a symbol of "The Eternal Light". Yet when they were cleaning out the Temple, only enough oil for one day's lighting was found. The miracle is that this oil supposedly burned and gave light for eight days until more oil had arrived.
The traditional celebrations emphasize different parts of the story.
Like Purim, the holiday is not tremendously important from a theological point of view, but it was important as a kind of cultural polemic and consolation for Jews who were oppressed and alienated, especially in medieval Europe. It comes right around Christmas, with the message that Jews have a history of strength and resistance, and a religion that could miraculously endure, even if only as a small light waiting to be replenished.
Ha"nuk*ka, or Ha"nuk*kah (?) , n. [Heb. khanukkAh.]
The Jewish Feast of the Dedication, instituted by Judas Maccabæus, his brothers, and the whole congregation of Israel, in 165 b. c., to commemorate the dedication of the new altar set up at the purification of the temple of Jerusalem to replace the altar which had been polluted by Antiochus Epiphanes (1 Maccabees i. 58, iv. 59). The feast, which is mentioned in John x. 22, is held for eight days (beginning with the 25th day of Kislev, corresponding to December), and is celebrated everywhere, chiefly as a festival of lights, by the Jews.
© Webster 1913
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