The last time my family went to a Halloween party with friends here in Japan, my oldest son ended up bummed out with how his outfit turned out, saying it wasn't a very good cosplay. I don't think that was the word he was looking for.
When my son said "cosplay," I immediately corrected him, saying the word he was looking for was kasou (仮装), which means "disguise" or "fancy dress." It is closer to the spirit of Halloween, with its history of people wearing disguises and going to masquerade parties. People can cosplay any day of the year. That's not true for dressing up for Halloween.
I can see why he said cosplay for Halloween, I might've used it before myself! But in Japanese, the word "cosplay" doesn't work for Halloween for many of the same reasons it's not used in English.
The way the word "cosplay" came into being shows how it doesn't quite fit Halloween in Japan. As Kotaku previously explained and as covered in Cosplay World, Japanese students started dressing up as popular characters during the 1970s.
Kasou, the traditional word for wearing disguises or costumes, didn't seem suitable. A new term had to be invented, and it was.
"Cosplay" is a portmanteau of "costume" and "play." Nobuyuki Takahashi is credited with coining the term in a June 1983 issue of My Anime magazine. His article featured photos of fans dressing up as anime and manga characters at the Comiket convention in Tokyo.
Just as the word kasou doesn't convey what costume-wearing folks at Comiket do, the word cosplay isn't the best way to express dressing up for Halloween. But as the country's younger generation increasingly associates wearing a costume with cosplay, don't be surprised if the word becomes the default to describe Halloween costumes in Japan.