In 1582 Pope Gregory XIII instituted the (you guessed it) Gregorian Calendar, which moved New Year’s Day from March 32nd (really) to January 1st. People who didn’t know that March 32nd was now April 1st and were still celebrating the old New Year looked pretty foolish that day, hence April Fools’ Day.
Or maybe the story’s just a prank. Pretty good tale, anyway.
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