This is what we found on Wikipedia regarding the Christmas Crackers:

Christmas crackers are festive table decorations that make a snapping sound when pulled open, and typically contain a small gift, paper hat and a joke. They are part of Christmas celebrations in the United Kingdom, Ireland and Commonwealth countries such as Australia, Canada, New Zealand and South Africa.

A cracker consists of a segmented cardboard tube wrapped in a brightly decorated twist of paper with a prize in the centre, making it resemble an oversized sweet-wrapper. The cracker is pulled apart by two people, each holding an outer chamber, causing the cracker to split unevenly and leaving one person holding the central chamber and prize. The split is accompanied by a mild bang or snapping sound produced by the effect of friction on a shock-sensitive, chemically impregnated card strip (similar to that used in a cap gun). One chemical used for the friction strip is silver fulminate.