Every year someone I know struggles with the Santa issue. So many of us grew up with Santa as a fixture of Christmas, but now are not so sure about it. Christians argue about it: "Real Christians don't do Santa." "Real Christians teach our kids why we celebrate Christmas and aren't so uptight about a little fun."
When my kids were little we weren't sure about Santa either. But we ended up deciding we wouldn't lie to our kids. We didn't want them to ask us what other things we'd lied to them about. Not that we accused our parents of lying to us about the whole Santa thing, but... we just couldn't do it. So we were very vague and didn't explicitly say that Santa brought anything to them, or that Santa existed at all.
It didn't take our boy long to ask us directly, so we answered him directly. He was, oh, about 4, or maybe 5. It wasn't traumatic. And since he knew, we didn't bother to keep up a pretense with his sister, 18 months younger. I think it disappointed some of our family members, but it's worked out for us. We did tell our kids it was not up to them to tell other children, and as far as we can tell they never did.
A helpful book in this area is Santa, Are You For Real? by Harold Myra. It tells the story of St Nicholas and the way he evolved into Santa. It's a cute little book and helped my kids sort out fact from fantasy. It may not be completely accurate either. There is seldom a definitive text when it comes to legends. But it doesn't really matter all that much anyway, does it?
In any case, it's nothing to argue about or worry about. A little common sense is all it takes to figure out how to handle Santa appropriately for your family. Be confident in what you are doing and people will be less likely to criticize you for it.