Events of all types, sizes, flavours, and prizes are organized by OMs and players.
Common types of OM-led events include bakeoffs, art and writing contests, and swordfighting, rumble, drinking and treasure drop tournaments. OM-led events are the main means for adding familiars, sleeping animals, and rare trinkets to the game.
Player-led events may be traditional lotteries and raffles, or contests, tournaments, and wagered matches. Since these are led by players and not OMs, it is impossible to guarantee fairness or trustworthiness when participating in player-led events. This said, an established forum thread and a well-constructed set of rules and procedures, as well as an active contact for queries, are all signs that a competent and trustworthy pirate is running that event.
Events are far from a new phenomenon. Here's a brief (but growing) summary of some important past events, and their broader impact on the game at large.
The Whitefire 24-hour Pillage
For more information on the 24-hour Pillage fad and why it died down, take a look at the 24 Hour Pillage article
Arguably the most influential event in the history of the game, as it actually caused the Ringers to change the sections of the game that governed brigand payout, the Whitefire 24-hour pillage made many people very, very rich. In short, Whitefire, a rockstar navigator in his own right, led a 24-hour pillage aboard a grand frigate in Ruby. It wasn't uncommon for payouts from single battles to be in the millions of PoE, more after inclusion of commodities, although this was divided amongst the > 100 pirates aboard at any given time.
The Poetry Death Match
See the Poetry Death Match article for more information.
Forum denizens were offered the chance at winning an Octopus familiar in exchange for displaying their literary skills in what is quite possibly the most exhaustive forum competition to date. Poems were written by participants across 14 disciplines over the course of three months, including both "standard" formats such as Haiku, and more rare and ancient ones such as Clerihew and Sestina.
At the end of the day, after fourteen rounds and extremely large amounts of poetry, Drusilla walked away with the Octopus.
The Olympic Champions League
See the main Olympic Champions League article for more information
A regularly-occurring gauntlet of challenges run by the OMs, the Olympic Champions League, or OCL for short, is "the main event" for many who participate in Events. Typically rewarded with a temporary (white) Familiar, the new OCL Rules do not specify what the new prizes will be, but it's expected they'll be extremely posh and spiffy.
The OCL includes competitions in brawling, sea battle, and drinking, and rotates across both sets of oceans so that every competition happens on every ocean at least once every six months. Artemis is the organizer.