At that age,
Nursery will give out invites - insist on replies though & bug parents for numbers for food if need be - but still cater for a few extra
if I remember well, we did a "teddy Bear Picnic" in a local park (but would work just as well in a garden) & it worked really well, but you can do any theme really
Gazebo in case of showers/shade from sun, decorate with balloons & streamers - suspend a bit of net across inside roof of it & fill with balloons & sequins.....let this go after cake/candle blowing.....makes for great photos, is exciting for them & keeps the kids occupied chasing/popping balloons for ages 
take out door toys, cushions picnic mat, dress up box etc & a trestle table for cake & adult snacks,
teddy bear cake (or whatever theme)
cardboard Party food boxes, you can pick these up cheap online, or even poundland etc - fill with small filled (cheese, marmite, jam etc) finger roll, veg sticks such as carrot, cucumbre, packet of pombear or similar, banana, apple or a few strawberries, etc - saves them fighting over food.
pass-parcel , but put small toy or lolly etc in EVERY layer, so that way they all get something.....have 2 going if a lot of kids
Don't bother with party bags, but fill a Pinata with party bag type bits & bobs, give each kid an empty bag & let them play pinata & fill their own bag - in my experience they LOVE this, & saves you a lot of headaches on numbers 
expect some people to turn up/not turn up, regardless of what they have already said - this kind of bad manners sadly is par for the course & something we all have to just get used to 