For those who don't know, the term "powwow" is not just a general term for any kind of Native American gathering or ceremony. In general American parlance the word has taken on numerous meanings--some of it bordering on derogatory--but most of the time just a misuse of the word. There are different stories about the origins of the word powwow, but the most common attributes it as deriving from the Algonquian word "pau-wau" which referred to the gathering of medicine men and spiritual leaders in the northeastern part of United States.
As the process of colonization displaced tribes and individual Indians from their homelands to other places--especially cities--powwows became important gathering places for homesick people and people who longed for cultural connections in a dominant society where they did not see themselves reflected. Some of today's larger powwows are well-attended events that draw thousands of people, many of whom travel thousands of miles to dance in competition for high-stakes prize money. The Gathering of Nations powwow in Albuquerque, New Mexico, for example, attracts more than 10,000 people each year and offers a purse worth more than $100,000. The top dancers are essentially professional dancers who travel all around the country and Canada to compete, relying on their winnings as income.
As a graduate student I once wrote a research project about powwow dance regalia; there is very little academic research on the topic and it was my small contribution in the effort to build a literature on the subject. I have drawn on that research to write an article for About.com's Native American history page as its new Topic Writer. Check it out, and while you are there check out the rest of the site and keep your eye on it in the next few months as I continue to build site.