Eastern origin
The feast of All Souls is probably of Eastern origin. In the early centuries Christians celebrated the anniversary of a martyr's death for Christ at the place of martyrdom. In the early fourth century, following the persecution of Diocletian, martyrs became so many that a separate day could not be assigned to each and the Church assigned a common day for all, celebrated in the East on the first Sunday after Pentecost: Homilies for the feast by St Ephrem the Syrian (373) and St John Chrysostom (407) are extant.
Development in Rome
In the West the Byzantine emperor Phocas (602-610) handed over to Pope Boniface IV (608-615) the Pantheon, originally built as a temple to all the Roman gods. On 13 May 610, Pope Boniface dedicated it as a church to St Mary and all the martyrs. But the anniversary was fixed for 1 November by Pope Gregory III (731-741) who consecrated a chapel to all the saints in St Peter's Basilica.
Ireland and England
The 9th century Irish Martyrology of Aengus (828-833) has a feast for All Saints on 1 November. The feast became known in England and Ireland as All Hallow's from which we get Halloween (the evening before All Hallows). It also took on some of the characteristics of the Celtic feast of Samhain. (See Féile na Samhna: an bhunchiall)
Who is included?
The scope of the feast includes all those officially recognised as saints, those whose cause for canonisation has not yet been completed, like Matt Talbot, the Irish Martyrs, Cardinal Newman and Pope John XXIII. But it also includes those whose holy lives were known only to their family, friends or religious communities. Chapter V of the Dogmatic Constitution on the Church Lumen Gentium of Vatican II is entitled The Call to Holiness and insists that the "all Christians in any state or walk of life are called to the fullness of Christian life and to the perfection of love" (LG 40).
Source: http://www.catholicireland.net/pages/index.php?nd=382&art=1882