Custom Holiday celebration

NPC Sims don’t really celebrate.. if you have a decoration style selected, then houses and venues will automatically have them up (usually the day before). You can select holiday specific interactions with them and they will join your Sim (such as New Years toast under friendly), so it depends on the traditions you add to your holiday. You can always invite Sims to join in on an activity. Also no your active Sim can’t trick or treat, only answer the door to give out candy.

That's sad on both accounts. I was hoping NPCs would join the festivities (dress up and such). I loved to trick-or-treat as a kid and to participate vicariously would've been fun. Maybe there's a mod or two that would allow for both.

NPC's usually just automatically celebrate on their own. Like if you have a holiday and the tradition is party spirit, they'll throw around confetti and sing just like your sims do. Ypu don't need to manually do anything for it to happen. At least that's been my experience.

The trick or treat thing is true, only npc kids can do it.

If you want, even though it’s not the same, for Halloween, you can make the tradition to ‘attend a holiday ceremony’ and let your sims ‘attend,’ and say they’re out trick or treating.