A Drop Party is an event when a player decides to drop items for fun. The dropper normally says, "having a drop party" or just "drop party". This may be a legit drop party with no harm, but in some cases it has been known to be a lure for players who have just started or assume too much good faith. When a player falls for this they get lured to the Wilderness where the dropper will pull out something like a Magic Bow or Ancient Staff and most likely kill at least one partier with their armour.
Some people will also cry out drop party with no intention of dropping anything or luring people, they do it simply to get people to follow them and disrupt peaceful gaming.
Update[]
Due to recent updates in the handling of Player Killing and the Drop Party setup, it is no longer possible to scam using this method.
The only way to be fooled by this situation, would be to 'stumble' into the Bounty Hunter mini-game with items of value, thus leaving the possibility open.
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the most common trick was to lure people who were wearing rare items and bring them into the "Wild." when the victum woulld be far out in the Wild the player hosting the "Drop Party" would give the items to the other player and then kill him/her. the victum would lose all of he/she's items and the player hosting would reclaim the items and the victum's items.