Answer:
They are sometimes called the Spirit of the Southwest. In the early 1800's small fires were ignited to light the way to the midnight mass on Christmas. This was upgraded and modernized by using brown bags or lunch bags with a good base of loose sand in them to prevent them from blowing away and to support a small candle which illuminated the way. For many the term farolitos is the same as luminarias. In any case, they are traditional in the Southwest during the holidays, but are being upgraded again with modern electrical systems pottery and ceramic paper bags, some include glass inlays and are beautiful works of arts and crafts. In New Mexico they compete with exterior Christmas lighting which simply doesn't have the same Southwestern flair.