'Se', in this case, is called 'partícula apassivadora', ou 'pronome apassivador', which is responsible for creating what we call in Portuguese 'voz passiva sintética'. You can clearly see it's a case of 'synthetic passive voice' when you translate this sentence into English: as Matheus said, it'd be 'How is Christmas celebrated here?' (passive voice).
In Portuguese, there are two types of passive voice; 'voz passiva analítica' and 'voz passiva sintética'. They have different structures:
- Voz Passiva Analítica: its structure is more similar to the English passive voice:
Sujeito (subject) + Verbo Ser (verb to be) + Verbo no particípio (past participle). Eg.: Como o NATAL É CELEBRADO aqui? (Natal = subject; É = verb to be; Celebrado = past participle).
- Voz Passiva Sintética: it has a different structure, like the one you used in your example:
Pronome Apassivador (se) + Verbo na 3ª pessoa (verb conjugated in the 3rd person). Eg.: Como SE CELEBRA o Natal aqui? (Se = pronome apassivador; Celebra = verb conjugated in the 3rd person).
NOTE: depending on the sentence, the 'pronome apassivador' may be placed before or after the verb conjugated in the 3rd person. This is due to the rules of 'pronoun placement' (colocação pronominal), which can be learned by following this link: http://www.soportugues.com.br/secoes/sint/sint72.php
For example, according to the Portuguese grammar, it's wrong to say 'Se celebra o Natal de forma diferente aqui', because one of the pronoun placement rules says that a 'pronome oblíquo átono' (se, me, te, lhe, o, a, nos, vos, lhes, os, as) can't be placed at the beggining of a sentence, so the correct way to say this would be 'Celebra-se o Natal..'.
On the other hand, let's take your example: 'Como se celebra o Natal aqui?'. When there is an interrogative pronoun (como, in this case), the 'pronome oblíquo átono' must be placed between the interrogative pronoun and the verb in the 3rd person.
Used informally, like Matheus explained.