The significance of Halloween to Buddhists now becomes clear. In the Druid system the period of seven weeks between Halloween and Yule is the gap between death of the old and conception of the new year. This corresponds to the 49 days of the bardo [temporary limbo after death in Tibetan Buddhism].
Halloween thus symbolizes the entry of the disembodied consciousness [a continuing process, not an entity] into the intermediate state between leaving one [physical] body and occupying another. In traditional [Tibetan and Mahayana] Buddhist beliefs the bardo-consciousness will experience hideous apparitions -- ghosts, demons, and so on.
If the mind reacts with panic then a samsaric rebirth, possibly in unpleasant realms, is inevitable. However, if the bardo-being recognizes these apparitions as hallucinations -- projections and reflections of its own negative karma resulting from [unskillful] actions -- then liberation remains possible.
The reasons for the Druidic custom of dressing up as ghosts, demons, and so on may be to symbolize that these scary bardo apparitions are in fact nothing other than aspects or appearances of the person's own self. Source