An Old Icelandic Tradition
The Icelandic Yule Lads bear little similarity to the world-famous Santa Claus, who is descended from St. Nicholas, patron saint of children and sailors. In contrast, the Icelandic Yule Lads are descended from baby-eating trolls called Grýla and Leppalúđi, and their original role was to strike fear in the hearts of children. Grýla traditionally went so far as to bring along the ‘Christmas Cat’, a black panther-like beast who will hunt down, kill and eat any child that doesn't get at least one piece of clothing as a Christmas gift. The mythos was so terrifying that in 1746 a public decree was issued to prohibit parents from frightening their children with monsters and fiends like the Yule Lads.
http://www.youtube.com/watch?v=rg7xbeiZf5I