Nowadays, when we hear céilidh, we tend to think of performances on stages. For the Gaels, céilidh simply means "a visit". Even in English in some areas you will hear "Johnny Angus made a little céilidh on us this afternoon." You could make a céilidh anywhere or anytime: at the mailbox with the mailman, in the grocery store or, of course, in people's houses. During céilidhs, songs and stories are often shared. A fiddle or the pipes might come out as well. Perhaps this is how "céilidh" came to mean "performance". For the Gaels, céilidh's often featured entertainment but everything was very informal.
Céilidhs also featured people of many ages. This was an opportunity for young people to learn stories, songs and family histories. In this way, the céilidh was sort of a cultural school and very important to the maintenance of Gaelic culture.
Watch the following video of a song being shared at a céilidh in Little Judique.