Fauns and Dryads performed the actual dancing, which was full of so many complicated steps and figures that dancers at first appeared to be moving randomly, and it took spectators some time to understand the dance. A ring of dwarves would circle round the dancers, throwing snowballs through them in such perfect time and with such perfect aim that, if all the dancers were in exactly the right places, no one would be hit. The Great Snow Dance was also a sort of game, because if a dancer was slightly off he would get a snowball in the face. But a skilled team of dwarves, dancers, and musicians could go on for hours without a single hit.
The Dance was accompanied by the music of four fiddles, three flutes, and a drum. The tune was wild, intensely sweet, just a little bit eerie, and full of good magic. It meshed perfectly with the dance itself and filled spectators with delight.
Role in the History of Narnia
After his captivity, Prince Rilian and his three rescuers--Puddleglum the Marshwiggle, Jill Pole, and Eustace Scrubb escaped from Underland through a tunnel and found themselves somewhere in Narnia (the exact location is unknown), in the middle of a Great Snow Dance. The dancers immediately stopped to dig Rilian and the others out of the tunnel, and the travelers were brought to Cair Paravel the next morning.
For a fuller explanation of these events, see The Silver Chair.