| The internet doesn’t seem to know the etymology of this phrase, so I’ll try an educated guess.
Fancy is quite a nuanced word by itself. Raw, it means “of an impressive or exceptional quality.” But there are lots of simultaneous connotations. First, it often connotes a surface quality rather than any functional or design quality. Second, it connotes a quality that the speaker is not used to. Third, it’s plebeian. You might expect to hear it at an Oklahoma church social in reference to someone’s new dress, but not conceivably by a dutchess at a state function in reference to the napkin embroidery.
I think pants in the phrase comes from the British usage meaning "underpants," because combined with all the connotations of fancy, it implies needless—because it is hidden—ornamentation. The alleged wearer, by extension, is one given to either pointless posturing as being of a higher class or flaunting an actual higher class amongst a lower class of people. Though the American sense of pants refers to the outer garment pantaloons, the sense of the phrase still carries the negative semantic orientation as if you meant the undergarments.
But that’s not what the party is about.
The Fancy Pants party began in June of 2000 when I was idly ruminating on the phrase, and the thought crossed my mind that it sounded like it would make a fun party. So that year I used my and my boyfriend’s birthdays (they’re 5 days apart) as an excuse to throw such a one. We and my then-roommate invited a bunch of people to show up wearing their fanciest pants. At that party we got everything from grandma’s fashion pants to antique motorcycle pants to handmade pants with hundreds of day-glow pom-pons hot glued on. We gave out awards in various categories, determined by ballot amongst the attendees. It was loads of fun.
History to now
Since then we’ve tried to hold a Fancy Pants party every year. The second year was a little more intense, with people knowing what to expect and putting in that much more effort to finding or making their fanciness. There was a short gap as we attended grad school overseas and then I lived apart in the great Northwest for a bit. I tried to organize virtual Fancy Pants parties amongst prior attendees, asking them to share photos, but it just wasn’t the same. So when I moved back to San Francisco, we started the whole thing up again, this time adding a theme: Revival. San Franciscans love costumes, and it was back into high gear. Last year was "Choose Your Own Adventure" pants, and there was some impressive (fancy?) interactive interpretations. This upcoming year is "Pants of Evil," and though it’s purportedly been a tough theme to interpret, I expect nothing but fabulousness.
The bar, it raises
The bar has been raising with each party, as long time attendees plan their pants earlier and earlier, and newbies hearing tales of pants past. Eventually I expect (and kind of hope) for people to arrive in Carnivale constructions of astonishing complexity and creativity. Perhaps I should invite some Sisters of Perpetual Indulgence.
Hopefully the awards are doing their job at raising the bar as well. I hand make them, and design them in some way related to the theme. The categories have formalized to the following. If you throw your own, take your guest list into careful consideration with #4.
- Fanciest Pants – A catch all category that often equates to most outrageous
- Best theme (made) – A category to encourage those who’ve put up the thought and effort to create their own.
- Best theme (purchased) – A category offered to help separate those with more money than spare time.
- Sexiest pants – A category to encourage the requisite flirtiness.
- Least fancy pants – A kind of no-award given to let people know that they don’t have to wear fancy pants to come and celebrate.
As a social structure
As a party device, the pants theme functions as excellent social lubricant. There’s always a fun "reveal" when folks arrive, and then easy topics of conversation throughout the night even amongst strangers as people discuss each others’ pants. If the theme hints at interaction, as the Choose Your Own Fancy Pants theme did, there’s not just a topic, but things to do. Of course it’s also an excuse to look at people’s legs and crotches, which carries with it a certain playful flirtiness.
Spreading the pants
Out of town guests and people from old co-hosts’ social circles have been spreading the meme, hosting their own Fancy Pants parties. So far I’ve only heard of two others: one in San Francisco and one in L.A., both direct descendants. Of course others may have spontenously generated of their own accord, but I’ll take any credit that’s due. In any case, I highly encourage attending or arranging your own, as it’s loads of pantsy fun for everyone. | 
