The ancient Egyptian calendar, like most anything in Egypt, depended on the Nile. It's amazing how much the Nile River influenced this country.
The ancient Egyptians were experts on the activities of the Nile, and watched it constantly. After a while they noticed that the river begins its flooding stage once every 365 days - this is how the 12 month calendar came about.
The Nile used to flood the fields every year which provided rich soil for agriculture.
They divided the year into 12 months of 30 days each... but that didn't add up to 365 exactly. It left over 5 days which were then added. This was called the civil calendar.
They didn't make leap years at the time which created gaps of 1 day every 4 years. This posed a problem after a while when they noticed the flooding of the Nile didn't come at the same "date" on the civil calendar. Still of course, it always came at the same time each year (by season).
So to solve this problem, they divided their civil calendar year into 3 seasons according to the activity of the Nile. They were:
The Egyptians divided the day into 24 hours, 12 for the day and 12 for the night. Each hour was named instead of numbered like we do today. The name would signify a particular religious or practical meaning. So instead of saying 12 p.m. they would say "time of the midday meal."
According to the civil ancient Egyptian calendar, the New Year began with the opening day of that year. This New Year's day was called "wepet renpet" - or "the opening of the year".
The real, or true, New Year's day was actually the first day of the Inundation season of the year. The ancient Egyptians called this day "First Month of Inundation, Day 1".
Another important day was "peret sepdet", or "the rising of the Goddess Sothis". This was the day that the star Sirius would appear visibly in the sky before sunrise (19th of July in our calendars). This signified the beginning of the Egyptian astronomical year.
Hope you're not too confused cause it's going to get a little more complicated.
The ancient Egyptians did not have a standardized calendar system. The years were not numbered continuously. The years were divided according to the ruling Pharaoh, or an important event. This would be something like:
Year 2 of the ruling of Rameses II.
Year of the battle.
So the only way to have a continuum was to divide ancient Egyptian history into dynasties according to these eras of rule or events. Check out the timeline for a clearer understanding of this.
Also, the ancient Egyptians divided the year into 10-day periods, calleddecans. These decans were named and identified by the rising of a specific constellation in the night sky. This is still in use till today by astrologers.