The funny thing is, I actually used to believe everything told in the lyrics of this song as a kid. This song is basically telling about all the "myths" and stories kids are told about Santa Claus and the concept of Christmas. The singer is warning the kids that Santa Claus is about to arrive. They should be on their best behavior so that they are rewarded by Santa. When you are on your best behavior, you get to be on the nice list, otherwise you get on the naughty list. Quite a bummer when you realize it's all a big fat prank right?