So can you use chicken wire as a base to wrap around the barrel?

Gingerbread wonderland of candy and gingerbread men
Frosty winterland of kids building snowmen and sleighing
Peppermint twist with candy canes
Santa's workshop
A Charlie Brown Christmas
Oh! Angels!!!

Melanie, Welcome, my suggestion would be adding lots of battery lights to whatever you come up with. When you get a theme going post some pictures and ask for more ideas here. I'm sure you'll get alot of response.

Good ideas, Nhardy. Do you have anything to go with any of these? I can see the tall slender Christmas trees, rustic stars with a woodland theme being a neat display perhaps.

Good Luck, hope you will share pictures of these decorated barrels with us here too.

Punk

Sounds like fun!!
Maybe a Polar Express theme w/a battery operated train going around a faux tree decorated with golden tickets, hot chocolate mugs, bells, ets.
A winter wonderland w/a tree growing out of a large birdhouse and all kinds of birds, squirrels, pinecones, nuts, etc.
A window in the middle with a forest scene on one side and a Christmasy room on the other.
A scene from "A Christmas Carol" or any favorite holiday book.
Make a Grinch mtn with the Grinch sledding down a spiral sled run, and Whoville touches.
A wishing well with Christmas decor for "Christmas Wishes."
A scene from a favorite Christmas card.
Make a large pop-up book scene.
Plant a faux tree and decorate with a theme, like lots of stuffed animals and Thrift store toys=Christmas is for kids or lots of faux candy(make large candy suckers with dowels, styrofoam circles painted like peppermint, and clear package wrap, oversized candycanes from the dollar store= Candyland Christmas, wrap large boxes with foil gift wrap or some other more weatherproof type of wrap, and stick in the tree and underneath=Christmas is a gift.

Hope that gives you a jump on some ideas.
Candy

Are these barrels primarily appreciated by motorists or pedestrians? You will want to base the scale and intricacy of the work on that answer.

You may go with a theme tied to your town or region. If this is a town beautification project, you may want to celebrate the town as well as the season. Although unstated, that is likely one of the purposes of the competition.