A combination of factors was involved.

[1] It could be considered almost "traditional" for fully professional armies - which the British, at least, still largely were in December 1914 – to treat war as a business and the enemy almost as colleagues occupied on the same business; Horace Smith-Dorrian, who was in command of the British II Corps, noted in his diary that similar incidents (such as British and French troops sharing access to wells and even sharing camp fires) had taken place in the Peninsula during the Napoleonic Wars.

This feeling of disinterested professionalism was far stronger on the British side than it was in the Belgian and French; these troops were fighting for countries that had been invaded and in which civilians - perhaps their wives and families - were suffering under German occupation. It's certainly for this reason that there were no many fewer reports of any sort of truce taking place in the Belgian and French sectors.

[2] The outbreaks of truce were spontaneous and reciprocal; when investigated, it was difficult to apportion blame. Most importantly, events were unexpected and were only investigated retrospectively, when it appears that it was considered unwise and probably counter-productive to come down too hard on men who had participated events that had not had catastrophic results.

Some senior officers did express disapproval, but in the form of threats as to what would happen if events were repeated. Smith-Dorrian went into the trenches on the evening of 26 December and issued a scathing report which observed that outbreaks of truce were "illustrative of the apathetic state that we are gradually falling into." He also issued strict orders against further interactions with enemy troops: "Informal understandings with the enemy are the cease. Officers or NCOs allowing them are to be brought before a court martial." A German army order of 29 December similarly forbade further fraternisation and said any instances would be treated as instances of high treason.

In practice these orders were not acted on, and only a single, mild, incident of punishment being enacted seems to have occurred: two British officers, Kenny and Welchman, were punished for their actions by having their leave stopped. It may have been significant that they were part of an Indian Army unit only recently arrived in France, the 1/30 Garwhal Rifles – the loyalty and fighting spirit of which may have been considered more suspect than that of British units.

Similarly, persistent rumours that specific units were punished for taking part in the truce do not stand up to examination. On the German side, some Saxon regiments were said to have been transferred to the Eastern Front as a result of their actions, but there is no evidence this was the case.

[3] At this early stage in the war there were still significant numbers of German reservists in the line who had lived and worked in Britain before the war – the famous "German waiters" of pre-war British invasion scare stories. Such men often spoke enough English to initiate contact and conversation with their predominately monoglot enemies. This had not been anticipated by the British and helps explain both why the first steps to a truce tended to come from the German side, and why the British high command was largely taken by surprise by events.

[4] In some sectors there is evidence that the truce was actually encouraged at a brigade and even a divisional level. Graham Williams, who was serving in the British section in December 1914, noted that

contrary to reports that I have read regarding this truce, which state that it was only maintained by the rank and file of both sides, and that the officers were dead against it, the reverse was the case in our sector, where it was encouraged... It enabled necessary work on our defences to be carried out in daylight, uninterrupted by machine-gun fire.

Similarly, John Buchan's History of the Great War noted that "possibly it [the truce] was connived at by commanders on both sides, for some of our trenches were nearly flooded, and the Germans had much timbering to do."

[5] The war had not gone on for long; many of those who had started for the front in August 1914 had believed the fighting really would be "over by Christmas" and this helps to explain the unexpectedly "Christmassy" yearnings reported on both sides. Similarly, the conflict was not old enough for all the men on either side to feel personal hatred for one another. It's interesting to contrast Christmas 1914 with Christmas 1916, when, after hundreds of thousands of casualties on either side, and the introduction of "terror weapons" such as poison gas, Lieutenant Edward Beddington-Behrens of the Royal Field Artillery noted in his diary that "Things have got past the stage where one can fraternize with the enemy, there is too much hatred flying about, it would also induce bad discipline in our troops."

[6] There seems to have been a general feeling that it was not realistic, and perhaps not fair, to punish officers and men for events when they had received no official guidance forbidding fraternisation. This would certainly explain why both sides took considerable trouble to issue stern warnings against a repetition of the 1914 truce well before Christmas 1915. On the British side:

The Brigadier wishes you to give the strictest orders to all ranks on the subject, and any man attempting to communicate either by signal or word of mouth or by any other means is to be seriously punished. All snipers and machine-guns are to be in readiness to fire on any Germans showing above the parapet.

On the German:

Any attempt at fraternization with the enemy (agreement not to fire, mutual visits, exchange of news etc) such as occurred last year at Christmas and New Year at several points on the Western Front, is strictly forbidden; this crime will be considered as verging on High Treason.... fire will be opened on every man who leaves the trench.

These orders were obeyed; in one instance, the British opened fire on a party of German soldiers attempting to erect a Christmas tree on the parapet of their trench, and wounded one member of the party. In a letter home, Roland Bull of the Queen's Westminster Rifles told his uncle that "We had a pesudo-merry Christmas on the front line – there was no fraternizing like last year – people remembered the Lusitania a bit, I think..."

An additional reason why the truce was not repeated in 1915 was that the weather was very different then; Christmas Eve 1914 had been marked by a sharp, unexpected frost that made the front appear unnaturally "Christmassy"; Christmas 1915 was mild, dismal and wet.

Two British officers - Captains Sir Iain Colquhoun and Miles Barne, both of the Scots Guards – actually were court-martialled at Christmas 1915 for agreeing a 45-minute truce to allow both sides to bury their dead. The pair were defended by none other than Raymond Asquith, the son of the then British Prime Minister HH Asquith; Barne was acquitted and Colquhoun sentenced to be "reprimanded," but even this punishment was remitted by the CinC, Douglas Haig, on the grounds of Colquhoun's impeccable service record and conduct in the course of the retreat of 1914.

Sources

Malcolm Brown and Shirley Seaton, Christmas Truce: The Western Front, December 1914

Marc Ferro et al, Meeting in No Man's Land: Christmas 1914 and Fraternization in the Great War