Depending on the theme of the party or person you are throwing it for, decide if you want to invite family first. These are the people you really have to deal with. Sometimes with family it's all or none. If you can't fit them all, better leave them all out.
Step2
Fill spots with your closest friends first. Especially for small intimate get-togethers.
Step3
After your closest friends you may choose friends depending on how often you or your family is invited to their functions.
Step4
Don't be afraid to leave out that obnoxious person that always drinks too much or gets too loud. Then scale out the people who would be offended if you didn't invite this person.