A poetic or archaic contraction of 'it was,' commonly found in older literature and Christmas poems.
A contraction combining 't' (it) and 'was.' Became particularly famous through 'Twas the Night Before Christmas' by Clement Clarke Moore (1823).
'Twas became a frozen word in English through one poem—most people only see it in that Christmas context, making it feel more magical and distant than it is, since people actually used it routinely in conversation.
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