The 92-year-old queen, the world's longest-reigning living monarch, also included the customary tribute to military personnel and wishes for world peace in the message, which was pre-recorded at Buckingham Palace and televised Tuesday.
"Some cultures believe a long life brings wisdom," Elizabeth said in the recording. "I'd like to think so. Perhaps part of that wisdom is to recognize some of life's baffling paradoxes, such as the way human beings have a huge propensity for good and yet a capacity for evil."
On a lighter note, the queen listed the House of Windsor's 2018 milestones with the same unabashed pride of someone writing their yearly Christmas letter for friends and far-flung relatives.
"It's been a busy year for my family, with two weddings and two babies, and another child expected soon. It helps to keep a grandmother well occupied," Elizabeth said, not forgetting to mention her own firstborn,
"We have had other celebrations too, including the 70th birthday of The Prince of Wales," otherwise known as heir to the throne Prince Charles.
The annual message was broadcast to many of the 53 Commonwealth countries. Elizabeth recalled that her father, King George VI, welcomed eight former British colonies at the first meeting of Commonwealth leaders in 1948.
"Even with the most deeply held differences, treating the other person with respect and as a fellow human being is always a good first step towards greater understanding," she said.
The queen mentioned her father, from whom she inherited the throne when he died in 1952, again while expressing gratitude for soldiers and sailors past and present. During World War I, two decades before his own unexpected ascension to the throne, he served with the Royal Navy and saw friends killed in battle, Elizabeth said.
"At Christmas, we become keenly aware of loved ones who have died, whatever the circumstances. But, of course, we would not grieve if we did not love.
Earlier in the day, Elizabeth and her family received cheers from a Christmas crowd when they arrived for a church service in the English countryside. A chauffeured limousine delivered the queen, while her descendants and their spouses walked from a nearby estate of the monarch's.
Prince Charles led the way, followed by his sons: Prince William and his wife, Catherine, and Prince Harry and his pregnant wife, Meghan. Harry and the former American actress known as Meghan Markle married in May and are expecting their first child in the spring.
The couple walked arm in arm next to William and Catherine. Many in the crowd wished them "Merry Christmas" as they strolled to the church in the English countryside on a cold, wintry morning.
After the 45-minute service, people gave them flowers as they headed back for a traditional Christmas lunch.
The queen's husband, Prince Philip, who is 97 and largely retired from public life, did not attend the service. Charles' wife Camilla, who is recovering from flu, also missed church.
William and Catherine's three children — Prince George, 5, Princess Charlotte, 3, and 8-month-old Prince Louis, also stayed home.
Britain's royals usually exchange small gifts on Christmas Eve, a practice popularized by Queen Victoria and Prince Albert. The queen typically frowns on extravagant gifts, and many of the presents are novelty items.
When the queen was younger, Christmas meant a brisk family walk through the woods on Christmas or an excursion on horseback.
Elizabeth delivered her first Christmas Day message when she took the throne in 1952. The seasonal addresses aired on the radio until she made the transition to television in 1957.
They have been broadcast during every year of her reign save one. In 1969, the queen decided her family had received enough exposure from giving a TV crew unusual access for a documentary.
That year, she issued the message in writing.