Of course they can! The name Halloween comes from All Hallow’s Eve, meaning the day before All Saints Day — those we call hallowed or holy as we hear in the Our Father.
However, we obviously want to steer people away from things like dabbling with the occult, or seances, or other kinds of “black magic” that would be contrary to our beliefs.
By the same token, if we are dressing up for Halloween we indeed should notice our style of dress and check to make sure that we are chaste in manner.
But dressing up children and sending them trick-or-treating is fine (and fun!) to do and is not contrary to our Catholic principles.
Check out this fine video by Fr. James Martin, SJ, that was produced here at Busted Halo.