The people attending the carnival looked gay and happy.

Answer: Option D

Occasion : a particular event, or the time at which it takes place.
Fair : a gathering of stalls and amusements for public entertainment.
Function : an activity that is natural to or the purpose of a person or thing.
Revelry : lively and noisy festivities, especially when these involve drinking a large amount of alcohol.
Carnival : a travelling funfair or circus.

Synonym of Carnival is Fair