From Nookipedia, the Animal Crossing wiki
You may think you have stepped out into a sprawling metropolitan street while walking about your neighborhood this week. Do not worry though, the town has not been moved without your knowledge... It is just decorated for Bright Nights!
In accordance with Bright Nights tradition, villagers decorate their houses with bright lights. In recent years, however, villagers have become so ambitious that a competition has evolved. The player is the judge of the villagers' decorations. They should walk around daily (although the lights themselves never change during the week) to check out the spectacle and then visit the Town Hall to talk to Tortimer. When the player first talks to him each day, he will ask them what they think of the lights in the town. If they answer "Gorgeous!", he will ask them to pick which villager's lights they like best. All human characters in the town may vote, and the last chance to vote is on Saturday. On Sunday, Tortimer will name the villager who received the most votes the Bright Star of the festival. The winning villager will complement any player who speaks to them, and the losing villagers will likely complain.
In addition to the villagers' houses, cedar trees are also decorated with lights.