Gift exchange is part of festive celebrations for many people in the modern world, including many traditions whose gift-giving season has just passed. In the pre-modern world, though, gift exchange was often a vital part of social, political, and economic life.
The essential principle of gift exchange is reciprocity. Giving someone a gift obliges them to return a gift of equal value. In the modern market economy in which every item can be assigned a monetary value, this is cause for anxiety (and comedy) over gift-giving, but in earlier societies value was measured in other ways. The value of a gift often depended on the prestige of the person giving it. Since gifts were reciprocal, they created a relationship, of which the gift acted as tangible proof. The modern taboo against asking the price of a gift (“Don’t look a gift horse in the mouth”) attempts to reinforce this kind of value in a monetized world.