What do you get when you goose a ghost? Answer: A handful of sheet!
Actually the origin of the traditional “bedsheet ghost”, an iconic symbol of Hallowe’en and kids’ costume parties, has several interpretations:
In some times or cultures ghosts appear in their grave clothes— the burial shroud.The poor shrouded bodies for burial by wrapping them in a winding sheet—white cloth that bound and covered the corpse, head to toe. A sheet could be represented as the winding sheet on the returned spirit in a theatrical play or story. Although burial shrouds have been out of fashion for so long that we barely remember them, the archetype of the ghost as a supernatural being draped in sheets has remained with us, unchanged.
From TV Tropes:
In Shakespeare’s day, it was common to portray ghosts in armor on stage (for example, Hamlet’s father is often depicted in a full suit of armor in historical depictions.) In Elizabethan England, armor was no longer worn in combat, and the costuming convention at the time was to dress characters in contemporary (Renaissance) clothing. So, by dressing a character in armor, the character was given an out of date look, and recognized as a ghost. However, as special effects became more elaborate, it became common to lower the actor playing the ghost onto stage with a pulley. Of course, the heavy armor clanked loudly, and by the 19th century, the sight of an armored ghost on stage was more likely to bring laughter than fear.Because of this, by the 1800s, theatres realized they had to create a new, recognizable look for ghost characters, one that would allow the actor to enter and leave silently. Perhaps inspired by traditional burial shrouds or depictions of ghosts as ethereal, misty creatures (both attributes predating the Bed Sheet Ghost), actors began to appear draped in white cloth to portray ghosts.