merry (adj.)
Old English myrge "pleasing, agreeable, pleasant, sweet; pleasantly, melodiously," from Proto-Germanic *murgijaz, which probably originally meant "short-lasting," (compare Old High German murg "short," Gothic gamaurgjan "to shorten"), from PIE *mreghu- "short" (see brief (adj.)). The only exact cognate for meaning outside English was Middle Dutch mergelijc "joyful."
Connection to "pleasure" is likely via notion of "making time fly, that which makes the time seem to pass quickly" (compare German Kurzweil "pastime," literally "a short time;" Old Norse skemta "to amuse, entertain, amuse oneself," from skamt, neuter of skammr "short"). There also was a verbal form in Old English, myrgan "be merry, rejoice."
Bot vchon enle we wolde were fyf, þe mo þe myryer. [c. 1300]
The word had much wider senses in Middle English, such as "pleasant-sounding" (of animal voices), "fine" (of weather), "handsome" (of dress), "pleasant-tasting" (of herbs). Merry-bout "an incident of sexual intercourse" was low slang from 1780. Merry-begot "illegitimate" (adj.), "*******" (n.) is from 1785. Merrie England (now frequently satirical or ironic) is 14c. meri ingland, originally in a broader sense of "bountiful, prosperous." Merry Monday was a 16c. term for "the Monday before Shrove Tuesday" (Mardi Gras).
Source:
http://www.etymonline.com/index.php?l=m&p=24&allowed_in_frame=0
Christmas (n.)
late Old English Cristes mæsse, from Christ (and retaining the original vowel sound) + mass (n.2).
Written as one word from mid-14c. As a verb from 1590s. Father Christmas first attested in a carol attributed to Richard Smart, Rector of Plymtree (Devon) from 1435-77. Christmas tree in modern sense first attested 1835 in American English, from German Weihnachtsbaum. Christmas cards first designed 1843, popular by 1860s. Christmas Eve is Middle English Cristenmesse Even (c. 1300).
Source:
http://www.etymonline.com/index.php?l=c&p=30&allowed_in_frame=0
The first reference I can find in the OED to "Merry Christmas" is from 1534. This date very roughly corresponds with the English Reformation and Henry VIII's breach with Rome.
From that time the idea of a "Merry Christmas" seems to take off with several entries in the 17th century. But it cannot, surely, have been protestants, let alone puritans, who promoted the idea of a 'Merry Christmas', since the word merry suggests at least mild intoxication.
Charles II (1630–1685) was known as the Merry Monarch, a reference to his lifestyle, many mistresses, and his annulment of the puritan laws instituted by Cromwell.
Source:
http://english.stackexchange.com/questions/214501/who-originated-merry-christmas