If you have an annual festival going on in your neighborhood that involves live music, street vendors, and games, you could call that a carnival.
The word carnival originally referred to a public festival involving general merriment and feasting, often taking place on the street and frequently associated with a religious holiday. Later the word’s meaning broadened to refer to a traveling show that offers similar activities, like a winter carnival or a fair. Nowadays the word carnival is also used figuratively to refer to something characterized by raucous disorder. If, for example, your coworkers ended up heckling your CEO at a company meeting, you could describe the scene as a carnival (although you would most likely NOT see any cotton candy in the board room).