According to Official Guinness Records,
The most people in a decorated hat competition is 1,410, achieved by The Caroline Foundation (Ireland), in Greystones, Ireland, on 11 September 2016. The hats were decorated with a nautical theme in mind. In the end Ms. Christine Maxwell was the winner and recipient of of a family weekend away.
For a complete list of 2016 records, please visit 2016 Guinness Records in Ireland.