She has had an eventful 2018, with the Duke of Cambridge and Zara Tindall both welcoming new additions to their families.
Harry, meanwhile, married Meghan Markle at Windsor Castle, with the pair becoming the Duke and Duchess of Sussex.
The couple announced a few months later that they are expecting their first child in the spring.
And another grandchild also got married - Princess Eugenie tied the knot with long-term boyfriend Jack Brooksbank.
Referencing these events in her annual televised address, the Queen said: "Closer to home, 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."
All smiles for Kate and Meghan at royal Christmas service
Kate and Meghan chat as they arrive for the service together, scotching rumours of a rift, before greeting crowds afterwards
She also spoke about the importance of being surrounded by loved ones, saying: "Through the many changes I have seen over the years, faith, family and friendship have been not only a constant for me but a source of personal comfort and reassurance."
And for those who are keenly feeling the loss of relatives or friends at this time of year, she sought to offer words of comfort.
"At Christmas, we become keenly aware of loved ones who have died, whatever the circumstances," the Queen said.
"But, of course, we would not grieve if we did not love."
She also remembered her father, George VI, reflecting on his time in the Royal Navy in the First World War and the part he played in the early years of the Commonwealth.
The Queen said the Commonwealth's strength "lies in the bonds of affection it promotes" and a "common desire to life in a better, more peaceful world".
She also paid tribute to members of the armed forces, many of whom are deployed abroad at Christmas, saying Britain owes them "our deepest gratitude".
But as well as offering words of comfort and including a touch of humour in her speech, which was recorded in Buckingham Palace's White Drawing Room, she also reflected on some of the darker aspects of life.
The Queen spoke of how religion can see people "fall victim to tribalism", as well as do good in the service of others.
Sitting at a desk and with a Christmas tree in the background, she said: "Some cultures believe a long life brings wisdom. I'd like to think so.
"Perhaps part of that wisdom is to recognise some of life's baffling paradoxes, such as the way human beings have a huge propensity for good, and yet a capacity for evil.
"Even the power of faith, which frequently inspires great generosity and self-sacrifice, can fall victim to tribalism."
The broadcast featured footage of 2018's two royal weddings, as well as the moments the couples kissed on the steps of St George's Chapel at Windsor Castle.
Also included was a clip of William and Kate presenting the first royal baby born this year, Louis, to the world outside the private Lindo Wing of St Mary's Hospital in April.
In June, Zara and husband Mike Tindall, a former England rugby player, had their second child - daughter Lena.
"We have had other celebrations too, including the 70th birthday of the Prince of Wales," the Queen said as the camera panned to a framed picture on her desk.
The image was the official picture released to mark Charles's milestone birthday. It features his wife, the Duchess of Cornwall, as well as the Cambridges and their children, and the Sussexes.
Although the Queen, as head of state, remains publicly neutral on political matters and does not express her views on issues, her call for unity in the speech may be interpreted by some as a reference to current political events and the recriminations surrounding Brexit.
She said the "message of peace on Earth" is "needed as much as ever" and also called for people treat others with respect, even in situations where there are "deeply held differences".
The Archbishop of Canterbury also called for unity, using his Christmas Day sermon to highlight the importance of forgetting "tribalism" and "political advantage".
Addressing worshippers at Canterbury Cathedral, the Most Rev Justin Welby said: "God's language of love is exclusive.
"It requires us to forget other languages of hatred, tribalism, rivalry, political advantage and of materialism, pride, greed, and so many more."
The Queen, 92, has been on the throne for 66 years and has been married to the Duke of Edinburgh for over seven decades.
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Her broadcast has become a traditional part of Christmas Day and is a rare chance for Her Majesty to share her personal thoughts with people in the UK and across the Commonwealth.
The palace does not explain the full meaning behind the message, leaving it open to interpretation.