The mistranslation of "kataluma" as "inn" is an excellent example of the difference between exegesis and eisegesis.
Ever since the days of Constantine, the legend of Mithra, who was born in a cave on December 25, has been merged into the myths of Christianity.
The translators were thoroughly steeped in that myth, and so chose to use the word "inn" as it best fit what they believed to be true (eisegesis).
Translating it as "guestchamber" would be consistent with other uses of the Greek words for "inn" and "guestchamber", and would allow readers to discern the truth from what the Bible says and from historical knowledge of the time (exegesis).
The Story
Mary was about to give birth when she and Joseph arrived in Bethlehem.
Because the hotel was full, they had the baby in a nearby stable (a
cave carved into a cliff face).
Some shepherds came to visit, followed by three wise men who brought
birthday/Christmas presents.
The family stayed in the cave stable for a few days, somehow avoiding
the wrath of the stable's owner while keeping the horses from
accidentally eating the baby. After a few days there, they returned to
Nazareth.
Historical Facts
-- No accommodation
Joseph would have to have been a completely irresponsible idiot to
take an expectant woman to Bethlehem without first having arranged
accommodation. Bethlehem is only five or six miles south of central
Jerusalem. Any sensible husband would have left her somewhere safe,
travelled to Bethlehem, booked a room, and returned for her in the
afternoon.
But Bethlehem itself was a very small town and close enough to the big
city that it's very unlikely it could have supported its own inn.
Anyone passing through the town from Jerusalem would be just beginning
their journey so wouldn't need to stop there, and anyone passing in
the other direction would be close enough to Jerusalem that they'd
most likely push on for another hour.
It's almost certain that Joseph had already arranged for
accommodations, likely with relatives that he knew would put them up.
Even if all that weren't true, there is still no way they would have
ended up in a cave. In that part of the world, even today, hospitality
to strangers is a way of life. Consigning to a cave a woman about to
deliver a baby would have disgraced the whole town.
But Mary and Joseph weren't just strangers. They were each direct
descendants of King David, the most important person to have
originated in Bethlehem. Anyone in the town would have been honoured
to have the couple stay with them.
And even if that weren't true, surely one of the shepherds would have
seen the disgraceful behaviour of his fellow citizens and taken them
back to his own house.
And even if that weren't true, if the magi arrived shortly after the
birth (as traditionally depicted in nativity scenes), certainly the
gold and valuable spices they gave would have easily purchased
accommodation for the rest of the family's stay in Bethlehem. But that
wouldn't have been necessary either. Matthew 2:11 explicitly refers to
a house, not a cave or stable: "And when they were come into the
house, they saw the young child ...".
The whole concept of their being abandoned like that requires so many
unbelievable situations and social relationships that it is
ridiculous.
-- Houses
A typical house in Bethlehem would have been a rectangular one-storey
building with part of it sectioned off for storage or to use as a
guestroom. The main room would have a raised section at the back,
where the family would eat and sleep, and a lower section at the
front.
This lower section would be used as a place for indoor work during the
day, while at night it would be covered with straw and used to shelter
the domestic animals to keep them safe from predators, and to help
provide warmth to the building. (Much farther north, snow igloos are
designed in a similar way, with sled dogs on the lower level providing
heat.) Stone troughs providing water and hay for the animals at night
would be built into one wall.
The Bible
Consider what the Bible actually says about this event, not what we
think it says. The King James translation says that "there was no
room for them in the inn". Note that it says "in" not "at" as one would
normally say. This seems awkward if not actually wrong.
In the KJV, Luke uses the word "inn" in two places, once here and once
in the story of the Good Samaritan. But in these two instances, the
original Greek words are different: the Samaritan's inn being
"pandocheion" (πανδοχεῖον), and Joseph's being "katalyma"
(κατάλυμα). The latter word is also used by Mark (14:14), and again by
Luke (22:11), and in both cases it is translated as "guestchamber". It
makes no sense that in Luke 2:7 it would be translated as "inn".
Some modern translations, such as NIV now do translate it as "guest
room". If we use consistent translation, Luke 2:7 reads as "... and
laid him in a manger; because there was not enough room for them in
the guestchamber". Not only does this read like more correct English,
it totally eliminates any reason for even suspecting they were in a
stable or cave.
A woman giving birth needs more room than what would normally be
available in a storeroom/guestroom. The animals were moved elsewhere
and the main room of the house was given to them. Since they lacked
baby furniture, the stone feeding trough, cleaned and lined with
straw, provided a convenient, comfortable, and safe crib.
The birth wasn't an emergency; they could have been in Bethlehem for
several days or weeks before the event: "while they were there, the
days were accomplished that she should be delivered". Similarly, it
would be reasonable to think that perhaps rather than returning to
Nazareth and then making another trip to Jerusalem, they remained in
Bethlehem for six weeks (Luke 2:22): "And when the days of her
purification ... were accomplished, they brought him to Jerusalem, to
present him to the Lord".
Joseph and Mary stayed in the house of a friend or relative as they
had planned from the beginning. Any consideration of the above
mentioned strange behaviours becomes moot. With a correct and
consistent translation of that one word, suddenly everything makes
sense.
Why
But why would the translators have made such a blatant mistake?
Even as early as the second century, people were already confusing the
births of Mithras and Jesus. For instance, Justin Martyr (now a Roman
Catholic saint) wrote: "Joseph, because he could find no place in the
town where to lodge, went into a certain cave near the town. And while
they were there, Mary brought forth Christ ... . ... adding 'that the
priests of the mysteries of Mithra are, because of these words,
instigated by the devil to say that in a place which they call a cave
their proselytes are initiated by Mithra himself.'.".
At the time that the Roman version of Christianity was being created
by Constantine and others, many people belonged to the Mithraic cult,
which believed that their god, Mithras, had been born in a cave. It
was almost trivial for the Roman Church to convert these people by
allowing them to consider Jesus to be just another name for Mithras,
and by incorporating their myths into Roman Christianity.
By the time the Bible was translated into English, well over a
thousand years later, the translators were very familiar with this
story, and it was much easier for them to mistranslate that one single
word than to change their beliefs.