The first Christingle service was held in a castle in Germany, on Christmas Eve 1747, by a bishop of the Moravian Church known as Pastor John. He wanted to find some simple way of teaching people about the true meaning of Christmas. His solution was to prepare a simple symbol which would make the Christmas message seem fresh and alive to them. During the informal service, Pastor John gave each child present a lighted candle wrapped in a red ribbon. He then intoned a prayer.
You can find out more about the origins of the Christingle (and Nativity plays) in What is Myrrh Anyway? Everything You Always Wanted to Know About Christmas, published by Icon Books, and Christmas Miscellany, published by Skyhorse Publishing.