"All this took place to fulfill what the Lord had spoken by the prophet: 'Behold, a virgin shall conceive and bear a son, and his name shall be called Emmanuel'"
"The icon is also a theology, a theology in color, expressing the experience of God with lines and paints rather than with discursive language. The goal of the icon and that of written theology are the same – to lead others to the mystical experience of God. The icon artistically depicts the experience so that others may approach the mystery and be invited to share in it." - Anton Vrame, The Educating Icon
The icon of the Nativity of our Lord is packed with theology. Most comes from Holy Scripture and all comes from Tradition. It depicts in paint the mystery of the Incarnation, God being man, and the beginning of our salvation.
In the top half of the icon, the 3 Magi (Tradition names them Caspar, Balthasar, and Melchior) follow the star that will lead them to the Christ child. At the top, angels proclaim, "Glory to God in the highest, and on earth peace, good will toward men." to the shepherds on the right. The icon depicts the shepherds and the foreign Magi as among the first to worship Christ emphasizing that salvation is for all mankind.
At the bottom right, Jesus is being bathed by midwives to depict that Jesus was indeed very human. On the left, is Satan appearing as an shepherd, telling St. Joseph, who is depicted as an older man (Tradition says he was already a widow when he married Mary), that Mary is not with divine child, but he has been betrayed. He overcomes his struggle and becomes the protector of the Virgin Mary and the guardian of Jesus Christ the Savior.
The Virgin Mary is in the center of the icon looking towards St. Joseph, relying on her Lord, her Son, praying that he will not listen to Satan. Mary is lying on a red blanket signifying the color of life. Next to Christ, in the cave are an ox and donkey there to remind us of Isaiah 1:3, "The ox knows his owner and the ass knows his master’s crib. But Israel does not know, and my people do not consider me."
There was no room for Christ in an inn, and so He was to be born elsewhere. Tradition uses the dark cave to represent the location of Christ's birth. In this dark cave is the light of the world that "shines in the darkness and the darkness can not overcome it."
Christ is shown born in this dark cave, wrapped in swaddling clothes, lying in a crib. The crib at the same time represents a casket, His swaddling clothes, His burial garments, the cave, His tomb. This is intentionally done to illustrate that the purpose of the Incarnation of Christ was to make possible the Crucifixion and Resurrection. We are in the middle of the fast, anticipating the Nativity, and the Nativity immediately point to the Resurrection.