"This holiday commemorates the re-dedication of the holy Temple in Jerusalem following the Jewish victory over the Syrian-Greeks in 165 B.C.E.," reports About.com. Although Hanukkah does not have the religious importance of the Jewish High Holidays, it has gained popularity in modern times due to its proximity to Christmas, and it is celebrated with more festivity than was historically traditional.
In 165 B.C., on the 25th day of Kislev in the Hebrew calendar, the Jewish rebel forces known as the Maccabees successfully reclaimed the Temple in Jerusalem from the Greek forces that had occupied it since 168 B.C. The Temple had been defiled by the worship of pagan gods like Zeus, and by practices such as the sacrificing of pigs upon the altar. Besides being non-kosher, pigs have a uniquely infamous significance under Jewish law, according to Chabad.org, and the Maccabees were intent upon the purification of the Temple.
To accomplish the purification, the Maccabees wanted to burn ritual oil on the Temple's menorah for eight days, but they were only able to find enough oil in the Temple to keep the menorah lit for one day. Miraculously, the menorah remained lit for the entire eight days, and the Jews have celebrated the successful rededication of the Temple ever since.
Hanukkah is the Jewish word for "dedication," and the Jews celebrate this holiday for the entire period of the first dedication. They light the first candle on the first day the menorah was lit, Kislev 25, and continue lighting one additional candle every day until the eighth day. Traditionally, the holiday is also celebrated with spinning the dreidel and eating fried foods like latkes. In modern times, it is also traditional for Jewish parents to give their children small gifts on each of the days of Hanukkah.