The British wear paper crowns while they eat Christmas dinner. The tradition of wearing hats at parties goes back to the Roman Saturnalia celebrations (celebrated around the 25th of December) when the participants also wore hats.
The idea of wearing a paper crown may have originated from Twelfth Night celebrations, where a King or Queen was appointed to look over the proceedings.
The paper crown hats they wear today are found inside the Christmas Crackers. Crackers are very traditional items to have at Christmas. A cracker consists of a cardboard tube wrapped in a brightly decorated twist of paper, making it resemble an oversized sweet-wrapper.
The cracker is pulled by two people and each one contains a small toy, a joke or motto, and a tissue-paper crown hat, usually a crown.