It means what it says, the more people the better everything will be.
It is also used sarcastically when an unwanted person is invited or invites himself.
Synonyms for the more the merrier
On this page, you will find 30 slang terms related to the more the merrier. Some of the top words include: geez yer, djwuusthes, probably, ks0n, int, and 25 more.