The Christian Era or Era of the Incarnation, the West European way of numbering years, is now in general use throughout the world. (Note, however, because of the diversity of religions CE now stands for Current Era and BCE Before Current Era). Its epoch, or commencement, is January 1, 754 AUC (ab urbe condita ‘from the foundation of the city [of Rome]’.
Christ's birth was at first believed to have occurred at the end of the seven days of the ancient Roman festival of Saturnalia on the 25th of December, the month immediately preceeding the start of year 1. (The pagan festive season of Saturnalia continued to be celebrated for seven days, despite attempts to cut it down to 3 days by the first Roman Emperor Augustus and later to 5 by Emperor Claudius, right down to the Christian age and beyond. It was the merriest period of the year).
In the Northern Hemisphere the natural year begins on the 21st of March (the Vernal Equinox) when spring starts and everything bursts into life. The old Roman calendar conformed to this and the year began in martius mensis (March) dedicated to Mars, the god of springtime and youth (rather than of war). December was the 10th month of the year, not the last, hence its name.
March remained the first month until 153 BC. In that year because of war the consular elections were held late and the two consuls were unable to enter office until the kalends of January. They insisted on serving their full twelve month term, so by that chance happening it was decided that the Consular year should begin on the 1st of January and end on the 31st of December. As a result we now pretend that the new cycle of the year starts at the deadest part of the year in the Northern Hemisphere and at its most flourishing in the Southern Hemisphere.
Years are reckoned as before or after the Nativity, those before being denoted BC (Before Christ) and those after by AD (Anno Domini, "in the year of the Lord"). Chronologers admit no year zero between 1 BC and AD 1. The precise date of commencing the annual cycle was widely disputed almost until modern times, December 25, January 1, March 25, and Easter day each being favoured in different parts of Europe at different periods.
The Christian Era, the numbering system we use, was invented by Dionysius Exiguus (c. AD 500- died after 525), a monk of Scythian birth resident in Italy; it was a by-product of the dispute that had long vexed the churches as to the correct method of calculating Easter. Many churches, including those in close contact with Rome, followed 95-year tables evolved by Theophilus, bishop of Alexandria, and by his successor, St. Cyril; but some Western churches followed other systems, notably a 532-year cycle prepared for Pope Hilarius (461-468) by Victorius of Aquitaine. In 525, at the request of Pope St. John I, Dionysius Exiguus prepared a modified Alexandrian computation based on Victorius' cycle. He discarded the Alexandrian era of Diocletian, reckoned from AD 284, on the ground that he "did not wish to perpetuate the name of the great persecutor, but rather to number the years from the incarnation of our Lord Jesus Christ."
But in his table, the year 532 ab incarnatione (from the incarnation) followed the year 247 of Diocletian. Somehow Dionysius reckoned the birth of Christ to have occurred in 753 AUC; but this is almost certainly wrong. The Gospels, written around 70 to 100 AD, state that Christ was born under Herod the Great i.e., at the latest in 750 AUC (King Herod died in 4 BC), and there is historical evidence of a census having taken place in Judea in 8 BC (although it is unlikely that a Roman official would have chosen the week of Saturnalia to conduct a census, no matter where he was in the Empire). Dionysius' dating was questioned by the Venerable Bede (c 673-735), and it was rejected outright by the German monk Regino of Prüm at the end of the 9th century. Nevertheless, it has continued in use to the present day, and, as a result, the Nativity as set out in the Gospels is now reckoned to have taken place on the wrong date several years after the birth of Jesus of Nazareth.
The ‘new’ chronology was not regarded as a major discovery by its author, his primary concern was the dating of Easter, and Dionysius' own letters are all dated by the indiction (see below). The use of the Christian Era only very slowly spread through the employment of his new Easter tables.
In England the Christian Era was adopted with the tables at the Synod of Whitby in 664. But it was the use, above all by Bede, of the margins of the tables for preserving annalistic notices and the consequent juxtaposition of historical writing with calendrical computations that popularized the new era. Recording the passage of the years became no less important as the Millennium approached when the Second Coming of Christ was confidently expected.
Outside Italy it is first found in England (in a charter of 676) and shortly afterward in Spain and Gaul. It was not quickly adopted in royal diplomas and other solemn documents, however, and in the papal chancery it did not replace the indiction until the time of John XIII (965-972). The Christian Era did not become general in Europe until the 11th century; in most of Spain it was not adopted until the 14th and in the Greek world not until the 15th century.
Of the alternative chronologies used by Christians, the most important were: (1) the indiction, (2) the Era of Spain, and (3) the Era of the Passion.
The indiction was a cycle of 15 years originally based on the interval between imperial tax assessments but during the Middle Ages always reckoned from the accession of Constantine, in 312. Years were given according to their place in the cycle of 15, the number of the indiction itself being ignored. It was introduced in what we call 312 AD and became obligatory for the dating of documents in 537 AD. This chronology was the most widespread in the early Middle Ages, but its use diminished rapidly in the 13th century, although public notaries continued to use it until the 16th.
The Era of Spain was based on an Easter cycle that began on January 1, 716 AUC (38 BC), marking the completion of the Roman conquest of Spain. First recorded in the 5th century, it was in general use in Visigothic Spain of the 6th and 7th centuries and, after the Arab invasions, in the unconquered Christian kingdoms in the north of the Iberian Peninsula. It was abolished, in favour of the Era of the Incarnation, in Catalonia in 1180, in Aragon in 1350, in Castile in 1383, and in Portugal in 1422.
The Era of the Passion, commencing 33 years after that of the Incarnation, enjoyed a short vogue, mainly in 11th-century France.
The dispute as to whether the new Millennium started in 2000 or in 2001 was totally nonsensical. There never was a year 1 AD to start computing the years from, 1 AD is purely a convenient label used by historians for chronological purposes.
Peter Ghiringhelli 
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