(from Catholic Encyclopedia)
Foremost among these is that which is now adopted by all civilized peoples and known as the Christian, Vulgar, or Common Era, in the twentieth century of which we are now living. This was introduced about the year 527 by Dionysius Exiguus, a Scythian monk resident at Rome, who fixed its starting point in the year 753 from the foundation of Rome, in which year, according to his calculation, the birth of Christ occurred. Making this the year 1 of his era, he counted the years which followed in regular course from it, calling them years "of the Lord", and we now designate such a date A.D. (i.e. Anno Domini). The year preceding A.D. 1 is called Ante Christum (A.C.) or Before Christ (B.C.).
BEGINNING OF THE YEAR
The date at which the year commenced varied at different periods and in different countries. When Julius Caesar reformed the calendar (45 B.C.) he fixed 1 January as New Year's Day, a character which it seems never quite to have lost, even among those who for civil and legal purposes chose another starting point. The most common of such starting points were 25 March (Feast of the Annunciation, "Style of the Incarnation") and 25 December (Christmas Day, "Style of the Nativity"). In England before the Norman Conquest (1066) the year began either on 25 March or 25 December; from 1087 to 1155 on 1 January; and from 1155 till the reform of the calendar in 1752 on 25 March, so that 24 March was the last day of one year, and 25 March the first day of the next. But though the legal year was thus reckoned, it is clear that 1 January was commonly spoken of as New Year's Day
The Christian Era has this disadvantage for chronological purposes, that dates have to be reckoned backwards or forwards according as they are B.C. or A.D., whereas in an ideally perfect system all events would be reckoned in one sequence. The difficulty was to find a starting point whence to reckon, for the beginnings of history in which this should naturally be placed are those of which chronologically we know least. At one period it was attempted to date from the Creation (A.M. or Anno Mundi), that event being placed by Christian chronologists, such as Archbishop Usher, in 4004 B.C., and by the Jews in 3761 B.C. But any attempt thus to determine the age of the world has been long since abandoned. In the year 1583, however--that following the Gregorian reform--Joseph Justus Scaliger introduced a basis of calculation which to a large extent served the purpose required, and, according to Sir John Herschel, first introduced light and order into chronology. This was the Julian Period--one of 7980 Julian years, i.e. years of which every fourth one contains 366 days. The same number of Gregorian years would contain 60 days less. For historians these commence with the midnight preceding 1 January, 4713 B.C., for astronomers with the following noon. The period 7980 was obtained by multiplying together 28, 19, and 15, being respectively the number of years in the Solar Cycles the Lunar Cycle, and the Roman Indiction, and the year 4713 B.C. was that for which the number of each of these subordinate cycles equals 1. The astronomical day is reckoned from noon to noon instead of from midnight to midnight. Scaliger calculated his period for the meridian of Alexandria to which Ptolemy had referred his calculation.