In a white elephant gift exchange, what does the "white elephant" refer to?

By this point, obviously, it describes the silly presents you bring to pass around at the holiday party. But it draws its roots from a monumentally petty (and almost surely false) legend: kings bestowing actual white elephants on their adversaries as intentionally impractical gifts.

Kings of Siam (today, Thailand) were the petty party, so the legend goes. White elephants, a revered animal in parts of East Asia, required constant care and didn’t bring in any money—essentially, the kings hoped to bankrupt the recipients under the veil of generosity.

This legend, though, has no basis in Siamese history and seems to have originated in America; nonetheless, in the States, the term “white elephant” came to mean something impractical but indispensable. Gift swap parties—where guests brought absurd, inexpensive gifts and swapped them—came to popularity in the early 20th century, and the phrase “white elephant party” quickly became attached to it. Thankfully, it’s all in fun—generally, the fewer bankruptcies caused by the gifts, the better.