Dreaming about a festival is generally seen as a sign of celebration. It indicates that the dreamer will soon enjoy some kind of reward, such as being with family or friends. It can also mean that there are more good times on the way.
For example, a festival with music could represent an event at which you danced or sang and felt like you were on stage such as a karaoke bar or singing competition. It could also represent the experience of being caught up in something exciting and fun, where you’re living life to its fullest.
Such celebrations are often followed by carnivals and more lighthearted activities like eating, drinking, and playing games after seeing a festival in your dream.