It is almost midnight, but the market town of Patzcuaro in Mexico is ablaze with light - and not just from the windows of the traditional adobe or wooden houses. Further afield, a cemetery is bright with candles that illuminate a carpet of glowing orange marigolds. Freshly washed gravestones are decked with fruit, flowers, food and drink. Men, women and even small children sing and play guitars or mariachi trumpets. They will sit here all night, their music mingling with the resinous, slightly citrus fragrance of the incense.

This is 1 November, part of Dia de los Muertos, the Day of the Dead festival that runs from 31 October to 2 November. It can be traced back to indigenous cultures as old as 3,000 years. In the pre-Hispanic era, skulls were displayed as trophies and used during rituals to symbolise death and rebirth. They were also used to honour the dead, and skeletal imagery was a symbol of fertility.

Today, the festival is celebrated all over Mexico and Latin America; similar festivals take place as far afield as Japan, China and New Zealand. And the Mexican Day of the Dead is a perfect example of how ancient pagan festivals have been married with Christian celebrations and beliefs.

The exact date and customs vary from one place to another, but the idea of reunion and celebration is constant. A feast of colour, food, music and light is prepared to welcome the dead back to these earthly pleasures and the company of those who have loved them. “You don’t die forever,” explains Miguel Angel Nunez, a Mexican anthropologist. “People really do think that when you die you go to another place.”

Mictlan, the underworld of Aztec mythology, consisted of nine distinct levels. The journey from the first to the ninth was difficult and took four years; dogs were buried with their owners to help them on their way. The dead had to climb an obsidian mountain, pass through icy wind that cut like a knife and walk among wild beasts that ate human hearts. Mictlan was ruled by the Lord and Lady of the Dead and other deities. From this place, just once a year, the dead were allowed to return.

When the Spanish arrived in Mexico in the 16th century, they introduced Catholicism and tried to suppress these beliefs, but only succeeded in aligning them with All Saints’ Day and All Souls’ Day on 1 and 2 November. The Day of the Dead is a rich combination of different rituals, but its core meaning persists.

The dead return in stages. On 1 November, the souls of dead children return, greeted by toys that their living loved ones have laid out. On 2 November come the souls of the departed adults. The incense, flowers and candlelight of the all-night cemetery vigil help the dead to find their way back home.

In houses, it is commonplace to find impromptu altars or shrines, which may also include a Christian cross, statues or pictures of the Blessed Virgin Mary. Preparations can take weeks. A photograph of the deceased is placed on the altar with things that mattered to them in life: toys and sweets for children; guitars, tequila and cigarettes for adults. Candles burn all night, so there is no darkness. Food and drink are prepared to refresh the dead after their long journey - though the food will be eaten, much later, by the living.

This is a time of celebration, not of sorrow. In Mexico there is a saying: “The paths of the dead must not be made slippery with tears.” As well as food, all sorts of colourful objects adorn the altars. During October, markets sell brightly painted “sugar skulls” and calaveras - images of skeletons that show the dead doing everything from singing to driving trains.

The Day of the Dead reaches far back into Mexico’s pre-Hispanic past. The Aztecs made offerings to the goddess Mictecacihuatl, the Lady of the Dead, honouring first dead children and then dead adults. Dead children were asked to protect the living against the terrible effects of hail in the harvest months of the year.

Mayan and Aztec customs still colour the Day of the Dead today. That citrus smell in the cemetery at night is copal, a tree resin burned as incense by the Maya as a “seeing instrument”. The Aztecs used it to cleanse a location and ward off evil, while marigolds, known in Mexico as “flowers of the dead”, were sacred to the Aztecs and used in religious rites.

On the Day of the Dead, arches of marigolds and paths of their petals lead the dead home. The scent of these flowers, along with the copal incense, is believed to guide them. Marigold designs decorate sugar skulls and marigold flowers are arranged in large, golden crucifixes: a living blend of Aztec and Christian beliefs.

Festivals of the dead are not confined to Mexico. In Japan, the festival of Obon in mid-August celebrates the return of the dead to their relatives. Colourful paper lanterns lit by candles are floated down the rivers at sunset to guide the spirits back to their realm of the dead. In Cambodia, Pchum Ben is a time of celebration and reunion, when people offer food to the pagoda for their deceased relatives.

Humour is the element that sets the Mexican celebrations apart. The Mexicans laugh at death, mocking it with names like “Baldy” and “Bony”. Children play “funerals” with little toy skeletons and coffins, while the calaveras are funny and friendly, not gruesome. They were originally a tool of political satire in the hands of Jose Posada, the brilliant late 19th- and early 20th-century engraver and cartoonist who created them. Posada’s most famous creation, La Calavera Catrina, is a glamorously dressed female skeleton: a grotesque and gawking reminder that even the rich must die. Here, death knows its place. At the end of the festival, masks are worn to scare the previously welcomed spirits away.

An account of the indigenous feast of the dead by 16th-century Spaniard Pedro de los Rios shows how little it has changed over the centuries: “They placed food and drink on their tombs... and looking north at night, recited great prayers to the dead, each one to his ancestors. Speaking aloud they said: come quickly, for we are waiting for you.”

In our efficient modern world, where birth and death are dealt with briskly, this festival remains refreshing, speaking of love that endures beyond the grave. The Day of the Dead belongs to Mexico, yet it seems to have increasing appeal to all of us. It is a unique, complex and colourful celebration of life.

Catherine Paver is an English teacher and singer-songwriter who writes songs about her travels. The Man From Mexico can be heard at www.paversongs.com

What else?

Key stage 1: Aztec life

Discover the ancient kingdoms of Mexico with a game and activities from tiddlypoohsmum.

bit.lyKS1Aztecs

Key stage 2: Day of the Dead

Introduce the Mexican festival to pupils using a PowerPoint from sash.aravis.

bit.lyKS2DayoftheDead

Key stage 3: Bony faces

Pupils can create their own ModRoc skeletons to celebrate the festival in an art lesson shared by mandasea.

bit.lyKS3Bonyfaces

Key stage 4: Back from the dead

From sugar skulls to food offerings for the dead, a Mexican family explains Day of the Dead traditions in a BBC Class Clips - Art amp; Design video.

bit.lyKS4BackfromtheDead.