As a Shinto term, best left untranslated. It may according to context be rendered 'festival', 'worship' 'celebration' 'rite', or even 'prayer'. The 'Chinese' pronunciation of matsuri is sai, so for example Kasuga-matsuri is also Kasuga-sai. The verb matsuru means in this context to deify or enshrine; to worship or revere someone or something as a kami. The ancient term matsuri-goto ('matsuri-affairs') combined the meanings of 'government' and 'ritual celebration', a concept revived in the Meiji notion of saisei-itchi. The most commonly understood meaning of matsuri today is 'communal celebration'. Not all matsuri are connected with Shinto or even religion; matsuri may refer to sporting, civic or commercial festivities, and the postwar constitutional separation of religion and state means that overt civic sponsorship of matsuri has to be directed to 'non-religious' festivals, pageants and parades oriented to the promotion of tourism and trade. Shinto and folk-religious matsuri predominate however and are celebrated all over Japan in a huge variety of ways. Most still are, or obviously derive from, annual calendrical celebrations which mark the seasons of the agricultural year with rituals for divination, planting, crop protection, rain and harvest. In a Shinto context matsuri is a communal occasion, normally connected with a shrine, in the course of which offerings are made and prayers, rites, entertainment and thanks directed towards the kami. The matsuri often includes a ritual procession (shinko) as well as shrine rituals. A matsuri of this kind generally includes purification, solemn liturgical elements including for example norito prayers and shinsen food offerings, and cheerful and sometimes boisterous community activities including processions with o- mikoshi generally carried by youths (for whom the practice offers a rite of manhood), contests of various kinds such as sumo, entertaining or mythological music and dance including hayashi, kagura etc., feasting and drinking sake. Devout participants see the occasion of matsuri as an opportunity to deepen and renew their relationship of reciprocal dependence with the kami; others see the matsuri as part of the customary fabric of daily and communal life (though some members of the community such as evangelical Soka Gakkai Buddhists and some Christians may refuse on principle to take part), and many simply come to enjoy the spectacle.
A Popular Dictionary of Shinto. Brian Bocking.