in my hometown back on long island, this is a local phenomenon, though i'm sure it's not restricted to my area.
a block party is when a whole block gets the township's permission to close off the road. then, they hire a dj, rent some carnival games, move all their plastic lawn furniture into the street, make lots of food, and then get drunk.
speaking from personal experience, this sort of get-together is great for the little kids and the middle-aged. all the teens from all over town tend to congregate at a darkened section of the block and drink the beers they've either purchase with a fake ID or stolen from the drunken middle-aged folk.
if your area has block parties, please add a writeup describing them. most people not from long island seem to give me an odd look when i describe this to them. i'd be interested to know where else this takes place and how it differs.