Engagement parties are like birthday parties with smaller cakes. Drinks, food, a small cake. Ballons and streamers. Its a chance for friends and family to say congratulations.
When you have an engagement party you usually invite the family and friends of the bride and groom. Serving drinks and appetizers is the most common route to go. Usually there is a cake at the party.
Send formal invitations to the bride and groom's guests. Make sure to prepare enough food and drinks for the guests. Think of a party theme that's simple, but elegant.
Don't invite anyone to the engagement party that will not be invited to the wedding. Guests aren't expected to bring gifts and traditionally parents of the bride throw the party.