A calendar is like a chain that emerges out of the waters of oblivion and holds the ship of history to its moorings. Beneath the surface of the waters, there must have been sunk some kind of an anchor. -- P.W. Wilson, The Romance of the Calendar
The calendar of Rome counted years from the legendary founding of the city by Romulus and Remus in the year we now call 753 B.C. Dates in Roman writings and inscriptions are not A.D. or B.C. They are A.U.C. - Anno Urbis Conditae, "in the year of the city's foundation". A Roman date would also give the names of the two men who served as consuls in that year.
British Acts of Parliament are dated by the year of the reign of the king or queen. In the United States, Presidential decrees are dated by the year since the foundation of the republic in 1776. It seems natural to measure the passage of years from some notable event.
In about the year A.D. 530, there lived a monk named Dionysius Exiguus - "Denis the Little" - from Scythia in south-west Russia. Like many scholars at the time, Dionysius was concerned with the correct calculation of the date of Easter, and he constructed a table of Easter dates for a nineteen-year period which he designated Anni Domini Jesu Christi 532-550.
At the time, years were measured from the beginning of the reign of the emperor Diocletian, two-and-a-half centuries earlier. Dionysius had decided, through careful calculation, that Anno Diocletiani 248 was 532 years since the birth of Jesus Christ. And since Easter commemorates the most important event in the Christian faith, Dionysius believed that it was inappropriate to date the years by the reign of one of the most notorious persecutors that the Church had ever known.
By the simple act of counting the years Anni Domini Jesu Christi, Dionysius gave the Western world the system for numbering the years that is still used today. It found its first champion in the eighth-century historian, the Venerable Bede, who used it in his Ecclesiastical History of the English People.
Several variations upon Anno Domini were also used: Anno incarnationis Dominicae, "in the year of Our Lord's incarnation"; Anno a Nativitate, "in the year after the Nativity"; Anno a Passione, "in the year after the Passion"; Anno Gratiae, "in the year of Grace"; Anno salutae humanae, "in the year of human salvation".
Historians and theologians now agree that Dionysius made a mistake in calculating the year of Christ's birth. The historical evidence makes it impossible for the Nativity to have occurred later than about 4 B.C., because that was the year in which Herod the Great is known to have died.
There is also astronomical evidence which links the Star of Bethlehem with a triple conjunction of Jupiter and Saturn in 7 B.C., an event which would have been of the greatest significance to astrologers because it meant that the two planets approached one another in the sky three times in a period of only six months.
Despite this error, the system invented by Dionysius remains the anchor which chains our calendar to its Christian origins. It is thanks to Dionysius that the year 2000 is the year 2000!