Deana Schupp, a cable company worker from Florida, stared out over the huge crowd on Washington DC's National Mall and had a sudden but welcome realisation. "When I see this crowd, I feel I am not alone. We are here for sanity and there are a lot of us," she said. It was, she admitted, her first protest march.

She definitely had company. Tens of thousands of people gathered here in what must surely be the strangest-titled mass protest ever held in America's capital: The Rally To Restore Sanity And/Or Fear.

It was the brainchild – or publicity stunt, performance art project or political expression – of the country's two leading satirists, Daily Show host Jon Stewart and Stephen Colbert, whose on-air persona of a rightwing buffoon lampoons the conservative media.

At first glance it looked like any other demonstration of the type Washington DC had witnessed by the hundred over the decades. A huge stage soared over the National Mall on a sunny autumn day. Behind the giant speakers and the railings was the gleaming white Capitol building that houses Congress. But a few things were askew. "Restore Sanity" declared large words emblazoned over the stage in the red, white and blue colours always favoured by anyone with a political message in America. And of course the huge portraits of Stewart and Colbert – done up to echo the iconic Shepard Fairey image of Barack Obama – stared out bewilderingly over the masses.

The crowd was enormous – easily a quarter of a million people. As the masses listened to music and comedy routines broadcast from the tiny distant stage over giant screens all the way down the Mall, it was an impressive display of the power of comedy and celebrity. Whether it was a display of the power of American liberalism was much harder to say. Many observers saw the rally as a response to Fox News pundit Glenn Beck's recent "Restoring Honour" rally, which occupied the same space several months ago. That event, which attracted between 250,000 and 500,000 people, was seen as symbolising the rising power of conservatism.

"Hello! And are you ready to restore sanity?" Stewart asked the crowd when he appeared. He and Colbert then kept the crowd laughing and cheering with a double act that played off their themes of mocking and bickering with each other, while simultaneously making their point about a gentler style of politics. "I'd like to have a more traditional beginning to a rally," Stewart said, to which Colbert replied: "Oooh, a book burning!"

Their stage act was in many ways a continuation of their TV routines, heavy on wit and poking fun at sacred cows. One of the funniest moments came with the introduction of singer and Muslim convert Yusuf Islam, formerly known as Cat Stevens. Islam began to sing "Peace Train", only to be interrupted by Colbert, who said ,"I am not getting on that train", before bringing on heavy metal legend Ozzy Osbourne to sing his 1980s hit, "Crazy Train". The O'Jays later sang "Love Train".

Stewart has played down any political intent behind the Restoring Sanity rally. "I wanted to come here as a sort of plea for a more commonsense politics," said Jake Edmonds, a 23-year-old student who had made a 14-hour car trip from northern Michigan. His driving partner, fellow student Nick Budes, agreed. "The number of people here is a physical representation of what a lot of people think: that everyone needs to take it down a notch," he said, referring to what many see as the overheated nature of American politics and the media outlets that cover them.

That chimed with Schupp and her fellow Floridian, Mike Puma, who works for the same cable company. "Not everyone is crazy. Obama may not be the best president or the worst, but I am pretty sure he was born here. I am pretty sure he is not like Hitler. We are the majority of people who don't actually believe this stuff," Puma said.

Indeed, the tone of the rally was satirical rather than political. Many of those attending wore costumes depicting the Mad Hatter, Wonder Woman or the scary rabbit character from the cult movie Donnie Darko. Signs waved by the crowd read: "Team Sanity".

The whole mood echoed Stewart's decidedly apolitical behaviour in the runup to the event. He has rarely, if ever, been an advocate for any sort of concrete agenda or liberal politics. There was no real talk, for example, of the intricacies of putting healthcare reform into practice, withdrawing from Afghanistan or job creation.

Instead, the atmosphere was one of irony and humour; of mocking those in power, not seeking to replace them. That fits the role that Stewart and Colbert play the best. They are the court jesters at the palace of the real power players in America. Their job is to point out the hypocrisies of the great and the good, not to oust them.

"The message is incredibly unfocused. They tell us it is not political. We should believe them," said Professor Robert Thompson, a popular culture expert at Syracuse University.

That has been echoed by the Rally for Sanity's cheerleaders in the media. Alexandra Petri, in a column for the Washington Post, gleefully highlighted how her generation had swapped political activism for ironic mockery.

"Call us Generation I. I for irony, iPhones and the internet… Sum up our lives in a phrase? The Importance of Never Being Too Earnest," Petri wrote in a piece that must have broken the hearts of countless former 1960s radicals. But she probably has a point. It was telling that a recent march on Washington organised by the labour movement attracted little attention, either in terms of marchers or media coverage.

"They don't have a TV station behind them making it all possible. That is probably the most important factor explaining the difference," said Jeff Cohen, a media professor at Ithaca College. Thompson also saw the rally as saying more about the state of celebrity in America than anything else: "PT Barnum could have done this on the Mall in the last century. It is about seeing someone you really like for free."

But however you defined the Rally to Restore Sanity, there was no denying its scale. Trains, buses and planes in and out of Washington were all packed to the gills. There was barely a spare hotel room within 20 miles of the centre of Washington, or at least not one that wasn't going for several hundred dollars above its normal price. Satellite rallies and parties to watch the whole thing broadcast live on Comedy Central were held all across the country from New York to Washington in America's rainy Pacific north-west. At least six events were being held abroad.

The Huffington Post, unusual in the America media landscape for its openly liberal agenda, hired a fleet of 200 buses to shuttle people from New York to Washington DC.

But if there was one group the rally did take genuine aim at, it was the American media. That has long been the true aim of much – if not virtually all – of Colbert's and Stewart's comedy. They have relentlessly gone after the mainstream media, accusing it of laziness, elitism and pandering to power, and generally holding it responsible for a dumbing down of American life.

Colbert's whole stage persona is one gigantic clown act aimed at conservative news pundits. It is no wonder, they say, that young people like the thousands on the Mall barely know what a newspaper is and never watch the evening network news.

"It is a sad commentary that the two most important news shows are on the Comedy Channel," said Cohen. "In their comedic format they are doing what journalists should be doing."