Rainbow flags are flying again in Sydney. They had barely been put back in the cupboard after celebrations over the passing of Australia’s marriage equality law before the LGBT community’s attention turned to the 40th anniversary of the Sydney Gay and Lesbian Mardi Gras.

The theme this year is “40 years of evolution” – a nod to the fact the event has been both protest and festival, according to Mardi Gras creative director Greg Clarke, but also to the changing political landscape in which the festival now exists: exemplified by the 61.6% of Australians who voted in favour of marriage equality last year in a postal survey, and the sheer visibility of a festival that now attracts hundreds of thousands of people to inner-city Sydney.

The two-week celebration officially kicked off on Thursday night with the opening of The Museum of Love and Protest at the National Art School. The exhibition, a flagship event for this year’s festival, charts four decades of LGBT activism and expression through archival footage, costumes, artwork, photography and more.

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On Sunday Fair Day takes over Victoria Park: a family friendly community day out that features stalls from LGBT community organisations, music and performance – including a dog dress-up show. This year’s Fair Day is one of the biggest since it began to be administered by the Mardi Gras organisation in the early 90s – 250 stalls and performers from throughout the history of the festival will make an appearance on the main stage.

The official Mardi Gras proceedings reach fever pitch with the parade itself on 3 March and the afterparty at the Hordern Pavilion, headlined by Cher.

The two-week festival is nigh unrecognisable from its first incarnation in 1978, when a group of activists corralled the local community into a march with shouts of “Out of the bars and into the streets!”. The brutal outcomes of that night – police violence, mass arrests, those arrested being publicly outed by the media – stand in stark contrast to the slick production values and international cache of the contemporary event.

There is, perhaps, an inevitable tension accompanying such success and increased visibility. Every year, segments of the community grumble that it is becoming too commercial. Earlier this year, a number of the 78ers – those activists involved in the very first march – expressed concerns that they weren’t being appreciated enough by the current organisation.

Others see the increasing professionalisation of the event working to exclude. Some believe the production values on floats by corporate sponsors, who have cash to spare, push up expectations for the community groups who scrape together funds out of their own pockets to build floats. Once, people would just turn up in spangles and glitter and walk the parade; now, Mardi Gras seems to “groan beneath the administrivia of bureaucracy” of putting on a marquee event, as one float organiser Guardian Australia spoke to put it.

This year, for the first time, a limit of 12,000 people and 200 floats was applied to the parade; organisers received more than 300 applications from groups wanting to march. Marchers are required to register, and float applicants to submit paperwork including detailed financial and project plans.

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The bureaucracy is a burden on both ends: for community members who want to participate but also for the organisation itself, which has faced financial difficulty more than once in the past.

Clarke says the cap on participants and floats was primarily logistical – in an anniversary year in the wake of a historic win for LGBT rights, in which there was overwhelming interest in marching: “There’s only so much room in the startup area at the bottom of Oxford St. There’s only so many vehicles you can fit in those closed-off streets and people you can fit in Hyde Park. Anything beyond that and it becomes unsafe.”

The community navigates the mainstreaming of the event in different ways. Alternative parties and events, such as the long-running Club Kooky and Monsta Gras, provide more niche spaces for celebration. Matthew Stegh, a member of the producing team behind Monsta Gras, which evolved out of an inner west arts community and has been running at the Red Rattler for nine years, said key to their programming was an intersectional feminist politics that they felt was lacking in some of the mainstream community events. “One thing that’s really important to us … is that the party remains very inclusive,” says Stegh. “[It’s] a space for people that don’t have that autonomy to move through other spaces or to go to other parts of the city.”

Clarke is adamant that the parade will always be an activist space. “It’s a platform for any group to participate and say what they want to say and express who they are. It’s always been that and it will continue to be that,” he tells Guardian Australia. “It really is the perfect platform for protest.

“I think there’s still a long way to go as far as equality goes, especially for trans people, especially for young LGBTQI people living in regional Australia … There are still so many areas where we’re not equal. There are still so many pieces of legislation where we’re not equal. So I think the fight ain’t over.”

