Hey! That's what WE call it!
I keep a little trip book with a list of "must do's" in each park and also get some autographs in it. When I gave the book to the evil queen to sign, she started flipping through the book reading it out loud. When she got to "character palooza" on that list she looked to her handler to ask if that was the official name for them now. Apparently word had not gotten around to her castle yet......
It's a lot of fun to see who's there. People love character interaction and I wish they'd do this sort of thing in the other parks as well. I remember the character bus at Epcot. We came out from lunch at Teppan Edo and at the bottom of the stairs was the earlier version of Character Palooza, all decked out for Christmas!