Before you host a contest, try attending 3-4 contests yourself. By seeing how they happen you will be able to grab a lot of ideas.
The parties you attend will help you establish contacts. Hence you can make a team with those people who have previously hosted such an event. Also this would help you know about all those people who consistently happen to appear on all such events. Thus, you can invite them to your party as well.
By looking at the entry price of other contests that are being held you can charge a price a little higher than the others. A higher price would attract those people who are not party crashers and rather ones who will take the contest more seriously.
Make certain rules that people with simple costumes will not be allowed to enter. This will ensure that everyone puts in much effort in the costume.
Try inviting celebrities. The more the celebrities you invite, the higher will be the number of people willing to come.
Keep a cash prize for the winner. Money helps to bring a lot of innovation. People will be more motivated to work hard on their costume.
Let the audience decide who is wearing the best costume. This will eradicate the element of biasness and people will be more satisfied from the results.
Female and male winners should be separate. You can ask the males to decide which lady is wearing the best costume and the females can decide which male is wearing the best costume.
You can also have other simultaneous contests in order to keep the crowd interested. Give them small cash prizes or cheap gifts.
Keep three winning prizes. Just a single winner does not seem to be fair especially when the crowd is a big one.
It is very important for you to check that your costs are covered in the end by the price of the tickets. You have to keep in mind that you will have to provide drinks and food as well to the participants. It is preferable that you find a sponsor for the event.