Folk music at its best. This Tudor Christmas carol from the 15th century was one of the most popular carols of the time. This version is sang by Loreena McKennitt, probably the greatest voice in English folklore music. She's from Canada (of Irish parents) but she often sings with a British accent because it best matches the kind of songs she usually sings.

God rest ye merry, gentlemen
Let nothing you dismay
Remember, Christ, our Saviour
Was born on Christmas day
To save us all from Satan's powers
When we were gone astray
O tidings of comfort and joy,
Comfort and joy
O tidings of comfort and joy

"Fear not", then said the Angel,
"Let nothing you affright,
This day is born a Saviour
Of a pure Virgin bright,
To free all those who trust in Him
From Satan's powers and might."
O tidings of comfort and joy,
Comfort and joy
O tidings of comfort and joy

The shepherds at those tidings
Rejoiced much in mind,
And left their flocks a-feeding
In tempest, storm and wind:
And went to Bethlehem straightway
This blessed babe to find.
O tidings of comfort and joy,
Comfort and joy
O tidings of comfort and joy

But when to Bethlehem they came
Whereat this infant lay
They found him in a manger
Where oxen feed on hay
His mother Mary kneeling
Unto the Lord did pray
O tidings of comfort and joy,
Comfort and joy
O tidings of comfort and joy

Now to the Lord sing praises
All you within this place
And with true love and brotherhood
Each other now embrace
The holy tide of Christmas
All others doth deface
O tidings of comfort and joy,
Comfort and joy
O tidings of comfort and joy

YE= (Old English) /ji:/ You.
In fact the title is wrong, it should be "God rest you merry", because in Old English YE was the form of subject plural and YOU the form of object plural, later YE disappeared and now we use YOU for both forms in singular and plural. But under the influence of I-ME (and the old singular THOU-THEE) people thought it should be YOU-YE, which is a mistake; it was YE-YOU.

MERRY= (Old fashioned) happy, cheerful.

GOD REST YE MERRY= (Old fashioned) may God rest you merrily, may God make you feel happy and relaxed.
The verb REST here is not a present (in that case it would be "God rests ye"). It is in the subjunctive mood (not in use in modern English) and is used to express a desire. An old surviving expression with the same "present subjunctive tense" is "God save the queen" (= May God protect the queen) or "God bless you".

DISMAY= Disillusion; loss of courage.

LET NOTHING YOU DISMAY= Let nothing dismay you.
In poetry we can often find hyperbatons like this. A hyperbaton is a figure of speech that uses deviation from normal or logical word order to produce an effect. We can find many hyperbatons in this song.

SATAN= The devil; the personification of sin and evil.

GONE ASTRAY= If you go astray you get lost or you take the wrong path.

TIDINGS= (Old English) News.

COMFORT= /kʌmfə*t/

JOY= Happiness.

FEAR NOT= (Old fashioned) Don't be afraid.

AFFRIGHT= (Old English) To frighten, to cause you fear, to make you afraid.

LET NOTHING YOU AFFRIGHT= (hyperbaton) Let nothing frighten you, let nothing make you afraid.

VIRGIN BRIGHT= (hyperbaton) bright Virgin (bright = shining; glorious, splendid).

TRUST= To place confidence in someone.

MIGHT= (Old fashioned) power.
(but in modern English we can still say MIGHTY=Powerful). In colloquial AmE we can also use "mighty" meaning "very", e.g., "that's mighty interesting" = "that's very interesting".

SHEPHERDS= /ʃepə*dz/ The man who takes care of the sheep (fem. Shepherdess).

REJOICED= Became happy.

FLOCK= A group of sheep.

A-FEEDING= (Old English) Feeding (eating).

BETHLEHEM= /beθlɪhem/ The name of the town where Jesus was born.

STRAIGHTWAY= (Old fashioned) Straightaway = immediately, at once.

BLESSED= /blesɪd/ Holy, saint, worthy of worship.

BABE= /beɪb/ baby.

WHEN TO BETHLEHEM THEY CAME= (hyperbaton) When they came to Bethlehem.

WHEREAT= (Old fashioned) At or To which place.

INFANT= /ɪnfənt/ Baby. An infant is a very young child, especially one who still can't walk.

LAY= (lie-lay-lain) To be in a horizontal position, resting on a surface.

MANGER= /meɪndʒə*/ The place where Jesus was put when He was born. A manger is an open box with straw or other food for cattle. (see picture)

OXEN= Plural of OX. An ox is a castrated bull. They grow fat and very strong and they were used to pull from heavy loaded carts. (see picture)

FEED= Eat. Notice the preposition ON (e.g. sheep feed on grass, lions feed on gazelles).

HAY= Straw. Hay is grass or other plants, such as clover or alfalfa, cut and dried. (see picture)

UNTO= (Old fashioned) To.

THE LORD= God.

PRAY= Talk to God.

DID PRAY= (Old fashioned) prayed. In poetry we can still find this old past tense. Instead of adding –ED to the verb, we use the auxiliary verb DID in front. In modern English we can still use this form for emphasis.

UNTO THE LORD DID PRAY= (hyperbaton) [his mother] prayed to the Lord.

PRAISES= Expressions of admiration (or of adoration to God).

WITH BROTHERHOOD= With the feeling that we are all brothers and sisters and so we love each other.

EMBRACE= Hold, hug, put your arms around a person.

HOLY= (adjective) Saint, sacred.

TIDE= (Old English) Time: "tide of Christmas" = Christmastide = Christmas time.

DEFACE= (Old English) Surpass, eclipse, outshine. In modern English this word has a different meaning (= to spoil, to vandalise), but we use the word EFFACE with the meaning of "surpass, eclipse".

DOTH= /dʌθ/ (Old English) Does. In old English, the third person singular in the present added -TH instead of modern -S, so "he loves you" was "he loveth thee" /hi: lʊvɪθ ði:/  .

DOTH DEFACE= The same as DID PRAY means "prayed", DOTH DEFACE means "defaces" (instead of adding -s for the 3rd person singular we say "does + verb").
The sentence "the holy tide of Christmas all others doth deface" means "the sacred news of Christmas is much superior/better to any other news".

Christmas carols are songs composed for Christmas, usually talking about the birth of Jesus Christ. This ancient carol describes what happened the day Jesus was born as it is described in the Bible:

Mary, a young virgin girl, got pregnant by the action of God, and she gave birth to the son of God, Jesus (also called Christ). But the day Jesus was born Mary and her husband, Joseph, were in Bethlehem and couldn't find a house to stay. Someone let them spend the night in a cave that was used as a stable for keeping animals, so when the baby was born, they put him on the straw of the manger because they had no bed or cradle.

An Angel of God appeared to the shepherds at night and told them that Jesus the Saviour was born in a nearby cave, so the shepherds went there to adore Him and found him in the manger.

The song starts telling us to be happy because Jesus was born on Christmas Day and He will save us from evil. Then it tells us the story of His birth. In the last part, they tell us to pray God and love each other because the birth of Jesus is, indeed, good news for all of us.