A karate party is a popular theme for young boys' birthday parties. Attendees aren't required to wear karate uniforms, but the decorations, food and games will feature some sort of martial arts concept. Since karate features fighting, safety should be a primary concern when planning karate themed games. Children should never be allowed to spar with each other; that is reserved for karate class.
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Pinatas are found at most birthday parties anyway, but in the case of a karate party, a pinata is even more appropriate. Instead of having the kids use a baseball bat, use a homemade bo staff. A broomstick will act as a perfect weapon against the pinata, just make sure you've removed the straw end first. The pinata itself may be in any shape desired, but many parents choose to buy one that features characters from martial arts kids shows such as Power Rangers or Ninja Turtles. If you want to get more creative with the karate pinata, have the kids use their legs instead of an object. They can practice their side kicks this way, but make sure they're not blindfolded if you choose to go this route.
Acquire thin balsa wood for a board breaking contest. An adult should hold the sides of the wood, while the child karate chops the board's center, breaking it in half. Everyone should take turns breaking a new piece of wood, and once everyone has broken a piece, stack two pieces and do a second round. Most of the boys will be able to break through two pieces as well, but it'll get more difficult by the third round (three stacked boards). Whoever can chop through the most pieces of balsa wood will be declared the winner. Offer a karate themed prize such as a black belt or small trophy for the winner.
An important aspect of martial arts is quickness and agility. What better way for kids to practice this at a karate party than by running through an obstacle course relay race? This should be done outdoors, preferably in a large backyard. If you have a playground that isn't occupied, that is an ideal place for this activity. Tires, trampolines, large tunnels or tubes, balancing boards or planks, stairs and monkey bars are all excellent additions to an obstacle course. It can be an individual timed race, or it can be a team effort, with two kids going through the obstacle course at the same time, tagging the next teammate in line upon completion (make sure the course is wide enough in this case).