I think it's a town square event where you talk to Isabelle and she gives you the bamboo grass, and there's a face standee, etc.
Would you be willing to let me come visit your Japanese town so I can participate in the event? *blush* I really love the bamboo grass and want it so bad! >_< I can bring Bells. I'm desperate! lol
Anyone Interested in the History of Tanabata
There are these deities called Orihime and Hikoboshi. The stars they are represented by are Vega and Altair, respectively.
You make a wish and they could possibly be granted in many years. Maybe if you made one as a child, your wish would be granted as a teen or young adult.
I went to my Japanese friend's town for the festival, it was still morning there so I'm not sure if anything happens at night. All I got was the bamboo grass.