Halloween was invented in Ireland. It's an ancient Celtic holiday, which the pagans started and the Christians adopted. The idea of the Christian version was to mock the devil, whose big sin is pride. I don't believe centuries ago the Irish put on costumes; they're a modern twist on the idea of mocking the devil. Originally, the Irish put candles in turnips and other small fruit and vegetables, rather than pumpkins.
Though I have been to Dublin four times, I was never there on Halloween. And while the modern observance of the holiday owes more to the U.S. than Ireland, my guess is it would be a roaring good time to spend Halloween in dear old Dublin.
I recommend the following: 1. Definitely see the Irish Writers Museum and the separate James Joyce Museum, which is only a couple blocks away. 2. See a play at either the Gate or Abbey theaters; the Gate has better actors, but the Abbey has better plays. 3. Go on a pub crawl; I like the literary pub crawl. 4. See the Book of Kells at Trinity College. 5. Book a tour at the Dublin tourist office of the stunning Glendalough monastery, which is 30 miles south in the Wicklow hills. 6. Tour either the Jameson distillery or Guinness brewery, though not both. 7. Tour the Kilmainham Gaol. 8. See Christ Church and St. Patrick's cathedrals. 9. Go to the National Gallery. 10. Go the pubs!
Have a great time. Cheers.