Centuries ago, in the pagan times, Scandinavian people believed that elves are house gnomes who guarded their homes against evil. If you were good, the elves were good to you, but if you were bad, the mischievous elves would play tricks on you. Although these gnomes mostly were benevolent, they could quickly turn nasty when not properly treated, so it is told.

Some of the tricks they enjoyed playing were giving you nightmares by sitting on your head while you were dreaming, tangling your hair as you slept, making your milk turn sour, and stealing your sausages. Folks believed that if they left a bowl of porridge on the doorstep at night, the elves would be happy and not subject them to their ornery antics. Throughout the centuries, they were either loved or loathed. Some people even believed them to be trolls and cannibals. The perception of gnomes largely depended on whether a person was naughty, or nice.

By the mid-1800's the true purpose of the elves was revealed by the Scandinavians. Elves - already a tradition associated with story telling and magic, assumed a new significance in the mid-1800's and their true intention began to be held as nothing else but to help Father Christmas (Santa Claus).

It is during this period when the elves began to be referred to as the "Christmas elves", or simply "elves", and not "house gnomes" anymore. It is now began to be held that the elves help Santa design and make the wonderful toys and gifts he brings to children. They were said to have other duties as well. Some elves take care of Santa's reindeer and keep his sleigh in good condition, ready to fly through the skies on Christmas Eve. Others help Santa keep his naughty and nice list in order, and some elves guard the secret location of Santa's village.

Elves make sudden appearances in the days before Christmas, to keep an eye on each child and see which of them are behaving well and obeying their parents. They are believed to be Santa's secret agents and report their findings back to him. Children who are unkind and misbehave have their names added to the naughty list and may wake up Christmas morning to find their stockings filled with lumps of coal or bundles of twigs!