The Empire Strikes Back
The party theme chosen for the annual town bash is "An Evening at the Mughal Court." All the (mostly white) townsfolk will wear saris and pretend to be Indian. The only thing it's missing is brownface.
At the party, there will be a ceremony honoring the Major's father called "COLONEL PETTIGREW SAVES THE DAY" (16.120). The story is that Colonel Pettigrew saved a maharajah's daughter on a train, and the beloved white savior was rewarded with the guns the Major now possesses.
By having this party and reenacting this event, the townspeople are basically endorsing imperialism, without seeing how this might be offensive to some people, like Mrs. Ali. Not that they care, really, because she's just the help, after all. In fact, Mrs. Ali's not even Indian; she's Pakistani, and born and raised in England. But the townspeople don't care about that, either. She's brown, and that equals Indian in their minds.
For this reason, Mrs. Ali and her friend Mrs. Rasool adopt an "if you can't beat 'em, join 'em" mentality and help out Grace to plan the party and hopefully minimize anything egregiously offensive. Mrs. Ali says, "Between the three of us, perhaps we can save the Mughal Empire from once again being destroyed" (8.121).
Of course things go wrong. Mrs. Rasool's father-in-law starts yelling at the party, "You make a mock of a people's suffering" (17.113). This offends Daisy, who is upset because it's ruining her lovely party, and Amina, who put a lot of effort into the choreography to make it authentic. She says, "I worked like crazy to make a real story out of this piece" (17.148). Abdul Wahid stands up for the old man, saying, "Your father-in-law spoke nothing but the truth. They should be apologizing to him for making a mockery of our land's deepest tragedy" (17.147).
The party is pretty much over at that point, and the Major doesn't even get the award to be presented to him during the ceremony. Not that he cares: it is at the party that the Major realizes this tradition, which isn't all that honorable to begin with, is far less important than Mrs. Ali's feelings. He chooses her over tradition.