The basic purpose of throwing an engagement party is to let your dear family members, your close friends, and all your colleagues know, you got engaged to be married. The party is a fun way of announcing your accomplishment.
The drawback of throwing an engagement party is the expenditures of energy in planning and organizing it, and of money in footing the bills associated with it. If you happen to invite someone for the engagement party but somehow forget to invite him again for the wedding, you will be earning his wrath.
Once it is decided to have an engagement party, it is generally the parents of the bride-to-be who plan for and host it. However the bride-to-be and the groom-to-be duo can do so.
The next issue to be considered is when to hold the party. The answer depends, apart from when it is convenient to you yourself, on two things: when did you get engaged? And when is the wedding going to take place. The ideal time would be 3 months or so after you got engaged or 6 months or thereabouts before the date of wedding.
The question arises as to who all to be invited for the engagement party. The rule of the thumb is to invite those who will definitely and certainly be invited to the wedding–unless they are residing quite far away from the venue of engagement party. This obviously is to prevent them from undertaking the long journey, with its associated bother and expenses, twice. This rule of course does not apply to the parents of the bride-to-be or of the groom-to-be; they have to be invited howsoever far they are residing.
The engagement party can either be made a formal affair at a state-of-the-art party hall with printed invitations and reply cards, or it can simply be an informal outdoor party at, say, a picnic spot or by the side of a river to which the guests are invited by phone.
During the party besides hors d’oeuvres and cocktails, excellent food that makes them lick their lips should be served to the guests with fantastic service to boot.
Of course, you do not expect a gift from the guests as etiquette does not dictate that guests should bring it. You should not make gifts a central issue of the party. However, some guests may bring gifts. For this reason it is advisable to have registered for a few things before sending the invitations for the engagement party. At the time of party you accept the gifts from those who have brought them and then put them aside. After the party has ended and the guests have left, open and look at the gifts. Etiquette here demands that you send a thank-you note to those who had given the gifts.