There is some dispute about whether or not it actually happened, some commentators saying that is must be apocryphal, no physical evidence, etc., and that it is really just a re-telling of the Moses myth (remember that the Pharaoh also was said to have commanded the slaughter of children, hence Moses was placed in a basket of rushes to save him and "Pharaoh's little daughter /went down to the water / and found the sweet child that was there".
On the other hand, people have commented that Herod was historically a nasty piece of works, that he did have killed hundreds if not thousand of real or potential threats, and that furthermore there could not have been more that 10 or so infants in a town the size of Bethlehem. so perhaps it's all quite plausible.
Seems likely that we'll never know.
Geoff: you bet it's called a Carol, and it is sung at Christmas, but it ain't a celebration of the birth of Christ. Rather, a lament about one of the consequences of the Birth of Christ. So is it really a Christmas Carol? Quack back, John.