If something happens on a stage, you can describe it as theatrical. Even reading a grocery list out loud can be theatrical, if you do it in dramatic voice with an audience watching.
An actor who works on Broadway rather than in Hollywood is theatrical, and a play can be described as a theatrical production. If it happens in a theater, or is related to theater, it's theatrical. You can also use the adjective theatrical to talk about behavior that seems like it belongs on a stage, like a little boy's melodramatic weeping when he discovers a cheese sandwich in his lunch instead of peanut butter and jelly.