The exact etymology of the term "boxing" is unclear and there are several competing theories, none definitive. The tradition has long included giving money and other gifts to the needy and those in service positions. The European tradition dates to the Middle Ages, but the exact origin is unknown. Some claim it dates to the late Roman/early Christian era when metal boxes placed outside churches collected special offerings tied to the Feast of Saint Stephen.
A clue to Boxing Day's origins appears in the Christmas Carol, "Good King Wenceslas." Wenceslas, who was Duke of Bohemia in the early 10th century, was surveying his land on St. Stephen's Day — Dec. 26 — when he saw a poor man gathering wood in the middle of a snowstorm. Moved, the King gathered up surplus food and wine and carried them through the blizzard to the peasant's door. The alms-giving tradition has always been closely associated with the Christmas season, but King Wenceslas' good deed came the day after Christmas, when the English poor received most of their charity.
In the United Kingdom, it became a custom of the nineteenth-century Victorians for tradesmen to collect "Christmas boxes" or gifts on the day after Christmas as thanks for good service throughout the year. Another possibility is that the name derives from an old English tradition: in exchange for ensuring that wealthy landowners' Christmases ran smoothly, servants were allowed to take the 26th off to visit their families. The employers gave each servant a box containing gifts and bonuses (and sometimes leftover food). In addition, around the 1800s, churches opened their alms boxes (boxes where people place monetary donations) and distributed the contents to the poor.
To protect ships...
During the Age of Exploration, when great sailing ships set off to discover new land, A Christmas box was a good luck device. It was a small container that priests placed on each ship while still in port. Crewmen, to ensure a safe return, dropped money in the box. It was then sealed and kept on board for the entire voyage. If the ship came home safely, the crew gave the box to the priest in exchange for the saying of a Mass of thanks. The Priest kept the box sealed until Christmas, and then opened it to share the contents with the poor.
To help the poor...
An 'Alms Box' was placed in every church on Christmas Day, into which worshipers placed a gift for the poor of the parish. These boxes were always opened the day after Christmas, which may be why that day became known as Boxing Day.
A present for the workers...
During the late 18th century, Lords and Ladies of the manor "boxed up" leftover food, or sometimes gifts, and distributed them the day after Christmas to tenants on their lands. Many poorly paid workers had to work on Christmas Day and took the following day off to visit family. As they prepared to leave, employers presented them with these Christmas boxes.
The tradition of giving money to workers continues today. It is customary for householders to give small gifts or monetary tips to regular visiting trade people (the milkman, dustman, coalman, paper boy etc.) and, in some work places, for employers to give a Christmas bonus to employees.