The Christmas Nativity Scene is a retelling of the account in the bible of Jesus' birth as found in the Gospel of Luke and Matthew. When Mary and Joseph were unable to find room at an inn, they took shelter in a barn for the evening. After giving birth, Mary and Joseph were visited by Shepherds, and Wise Men from the East. Those figures, plus the livestock from the barn, are usually found in a Nativity Set.The tradition of a displaying a nativity scene, or nativity crèche (crèche meaning manger), started in Germany in the 1600s. There is record of a live nativity scene that dates all the way back to the 13th Century in Italy.
(text from: http://www.stcharleschristmas.com/nativityscene.htm)