Here is the deal. We live in the same town as most of our families. This means a lot of people.
Back when our daughter was born both sets of my Grandparents were still alive and 1 set of my husbands Grandparents were alive, then you add in all of the Aunts, Uncles, their children and their children. It adds up.
Plus each of my parents were remarried.
And then our siblings.
Just the basic in town family can easily be 40 to 50 people.
So we held our daughters first Birthday Party out at the family lake house. Of course she was way too young to remember, but the rest of us remember.
It was one of the last times, both of our families were all able to be together for any event, because it seemed like the next few years, people moved or people passed away or became too frail to be away from home for very long
Our daughter still took her nap at 1:00, but the rest of us continued to visit etc..
So I think Birthday Parties are the size they need to be for each family.
As our daughter started attending day care and then school, we would go out to eat where ever she wanted to go and then we would either invite the grandparents Aunts and Uncles, or just go to Great Grandparents/Grandparents homes for cake.. etc.
And then our daughter would have a little party with her school and neighborhood friends
Again, whatever worked best for the older people in the family.