The cake traditionally eaten in Italy for Christmas is called panettone. It’s actually a kind of sweet bread that was originally from Milan. It began production in 1919 by Angelo Motta who was the on that put a twist on the original version.
By World War II, it was affordable enough for everyone and it became the traditional Christmas sweet.
It has a round shape and is generally 12-15 cm in height and weight 1kg. Making the cake is a very long process that involves curing the very acidic dough, kind of similar to sourdough. Then you have to proof it, which takes several days.
This gives the dough a very fluffy characteristic. It contains citron, candied orange, lemon zest, and raisins. You can also make it in plain or with chocolate.
It is generally eaten with hot beverages or wine. In some places within Italy, it is made from eggs, mascarpone, and sometimes dried or candied fruits with a sweet liquor.
Here’s a simple recipe for the Italian Christmas cake: https://www.bbcgoodfood.com/recipes/panettone