On the vigil of St. John the Baptist, commonly called Midsummer Eve, it was usual, in most country places, and also in towns and cities, for the inhabitants, both old and young, and of both sexes, to meet together, and make merry, by the side of a large bonfire in the middle of the street, or in some other open and convenient place. Over this fire, the youths frequently leaped; and they also exercised themselves with various sports and pastimes, more especially with running, wrestling, and dancing. These diversions they continued till midnight, and sometimes till cock-crowing.
In London, in addition to the bonfires, on the eve of this saint, as well as upon that of St. Peter and St. Paul, every man’s door was shaded with green birch, long fennel, St. John’s wort, orpine, white lilies, &c. and ornamented with garlands of beautiful flowers. The citizens also had lamps of glass with oil burning in them all night; and some of them hung out branches of iron, curiously wrought, containing hundreds of lamps lighted at once, which made a very splendid appearance.
The reasons given for making bonfires on St. John’s eve, are various, among which are the following: “they made large fires, which might be seen at a great distance, upon the vigil of this saint, in token that he was said, in holy writ, to be a shining light.” Also, these fires were made to drive away the dragons and evil spirits, which hovered in the air. In some countries, bones were used for fuel, whence they were called bone-fires, (by contraction, bonfires,) “because the dragons hated nothing more than the stench of brenyng (burning) bones”
Source: Ancient customs, sports and pastimes of the English (J.Aspin, 1832)