Originally, Memorial Day started out with little fanfare when, after the Civil War, many areas began paying tribute to the 600,000 plus fallen soldiers. (More lives were lost in the Civil War than any other American conflict.) Initially, it was known as Decoration Day. Women of the South began the tradition of placing flowers on the graves of their fallen. In 1868, not long after these impromptu tributes, General John Logan proclaimed the 30th of May to be the day of commemoration.
General Logan served in the Mexican-American War and was a general in the Union Army. In addition to being a state senator, US Congressman and US Senator, he was the head of an organization for Union Civil War veterans. His efforts to commemorate fallen soldiers lead many to believe his movement makes him the most prominent figure among those most responsible for Memorial Day being recognized as an official holiday.
Many people place flowers on the graves of the fallen soldiers. In fact, there is a small controversy regarding why the date for Memorial Day was chosen for May 30th. One faction believes it to be because there had been no battle on that date, another believes it to be because it is the optimal time for flowers to be blooming.
Northern states quickly picked up the tradition, and by 1890 all were paying tribute to their fallen on May 30th. However, the Southern states held their honors on different days.
Congress enacted the Uniform Monday Holiday Act in 1968, making Memorial Day the last Monday in May in order to allow for a three-day weekend. The act went into effect in 1971, and Memorial Day was declared a federal holiday. It is now celebrated nationwide on the last Monday in May.
(Information compiled from the History Channel website and Wikipedia)