The 4:20 councils, which are supposed to start at 4:20 PM each day, get their name from the police code for the smoking of marijuana. Police have code numbers they use, as shorthand for various types of crimes that need to be investigated, such as breaking and entering, assault, littering, whatever... and the code that meant someone is smoking marijuana was 4-20.
Or at least that's what I was told. I have a vivid memory of hearing this story from an authoritative tour guide-type on a bus in Amsterdam, but apparently this is one of those urban myths you hear so much about. Since then, I've heard a variety of stories about the origin of the usage of "420" as a euphemism for smoking pot, ranging from that being the number of chemicals in the plant (also not true) to it being the time at which some high schoolers in California or somewhere met after school to get high (which may indeed be the real source of the code).
In any event, 420 has been embraced by stoners everywhere as a secret symbol of identity. If you see someone wearing a hat or a t-shirt with this number, think of the Christian fish or the gay community's pink triangle, and look into the face of someone being oppressed by the drug war. Beer lovers can wear t-shirts proudly proclaiming to the world that they love beer; but potheads must sneak around and proclaim their passion only with coded numbers.
And when the clock rolls around to 4:20, look around and see who's missing... the stoners have probably all sneaked off to have a toke around then. Getting high at 4:20 has become part of the mystique. It seems to be emerging as a solidarity kind of thing... stoners who make a point of smoking at 4:20 can be certain that all over the place (within their time zone anyway) other stoners are joining them.