Party games are games played at parties. Or, to quote the Professor, party games are wholesale amusements encouraging social interaction and teamwork. At least the boring ones are. The fun ones are cutthroat and cause strife, mobocracy, chaos and danger. They're also easy to set up, simple to play, and usually don't last too long.
Apples to Apples is a classic. Each round a new adjective card is drawn, and all players except the judge anonymously submit cards that match that word. (For example: if the adjective card says "Shocking," players submit cards like "paying taxes," "a bad haircut," "Dennis Rodman," etc.) The judge then picks her favorite and awards the winner one point. A fast-moving game for up to 12 people, this one is ridiculous and flexible.
The T-Shirt Game can't accomodate as many people, but the potential for outragous fun is higher. Each player submits an absurd slogan to match a picture to create their own T-shirt. If you're in to trivia, Cranium is a great option. If you like trivia but don't know as much as a fifth grader, Wits and Wagers lets you win by acting like you know what you're talking about.
If you're looking to learn more about the people you play with (and enjoy hilarity and awkwardness), Imaginiff is unbeatable and perfect game for two families to play together. Hit or Miss and Truth be Told also promote deeper interaction between players. Pass the Bomb is a fast-moving word game for almost any number of players. Players use letter cards to spell a word before they can pass the bomb to the next person.