The gala appeared dead throughout last year because of a lack of volunteer support. At one stage it was cancelled, but a band of volunteers rallied together and promised to revitalise the event.

Families gathered on the footpaths of Vincent St to witness 40 entries in the colourful float parade.

Parade committee member Bettina Ralph said the Daylesford community and Vincent St shopkeepers were happy with the event.

"Some of the feedback we've had suggests it was the best parade in 20 years," Ms Ralph said.

But Ms Ralph said the problem of having too little volunteers for too much work was not solved.

"We could have still used more volunteers. Another six would have made it easier," she said.

She said an upbeat post-event meeting was an indication the annual event was here to stay.

"Everybody was positive at the meeting. Logistically everything went really well on the night," Ms Ralph said.

Daylesford Police reported excellent crowd behaviour despite two men being charged with criminal damage.

Holcombe Ward Councillor Bill McClenaghan, who was a volunteer traffic marshall at the event, said the festival was significantly better than in previous years.

"It was better, there was more floats, heaps more people and a good community spirit," Cr McClenaghan said.

"It was hot and the day was a Total Fire Ban. But luckily there were no fires and all CFA volunteers were able to attend," he said.

"It happened because a lot of people came together and volunteered their time.

"It's a very important event for Daylesford and district," Cr McClenaghan said.