It's much like a Field Day back home; a day of games, relays, of being outdoors. Taiiku (体育) is the word for physical education or physical training.
My school also features an Endan performance, in which students tell a story through dance. The Endan is a pretty fair-sized production for us, but my Japanese colleagues have told me most schools don't make such a big deal out of it. It seems that in Japan as perhaps in any place, schools have their own cultures, so how much emphasis is placed on arts, academics, and physicality depends on the institution and its people.
Anyway, here are some pictures from yesterday's 体育祭. This is all the Endan.