The "White Elephant" Christmas party tradition has been passed on through many generations. It's a fun way to spend christmas with friends, family, coworkers, etc. But...what does a white elephant have to do with it anyway?
A White Elephant gift exchange or a Yankee Swap party is when people bring funny and ridiculous gifts to trade with. It is a good way to "break the ice" with some new people. The white elephant gifts can be swapped, traded, and stolen as well. Common gifts I've seen at a white elephant party were old books, crazy socks, candy, and CD's. The main goal is not necessarily to get something that people placed on their list. The exchange is meant for the entertainment of the guests.
White elephants were and still are sacred beings. They are honored in a multitude of religions and were forbidden to do any kind of labor. Therefore, the white elephant was a giant animal that was difficult to maintain and could not do much for you
The United States began trading with the countries in Asia for this burdensome gift and realized its true usefullness. People began "white elephant" sale stores, which sprang into the parties that we know today. A Wikipedia Article "White elephant gift exchange" suggests that this tradition could have gone as far back as 1828.
Nonetheless, it takes a little bit more thought to come up with a clever gift. You never know what could happen at one of these parties. People may be fighting over the gift you thought was garbage. What a perfect way to say "Merry Christmas".