DD loves to run around, and sometimes she listens well, but I really can't count on that. Sometimes, being in a totally unfamiliar place will get her to stick a little closer to me, but not always. We always start her in a carrier. She's usually happy there for a little while as long as we keep moving. Then, it's about responding to her needs. I live literally across the street from where most of the festivals are in my city, and so we've had a good bit of experience what the good and bad of that.
Go when it's less crowded if you can. The more crowded it is, the harder it is to keep him safe when he's on the ground. Keep him in a carrier or stroller as long as you can so that you can see as much as you can. If he wants down, find an appropriate place to do that. A lot of musicians love to have children dancing during their performances (if the volume isn't too loud), or the crowd isn't so bad if you step out of the bounds of the festival so that he can take a walking break. If you set him down in the crowd, you really have to be right behind him and have a parent devoted just to him. People won't see him down there, and he could get bumped or stepped on if you aren't looking out for him. Once he's walking around, it's probably difficult to get him back into a stroller or carrier as long as he's interested in what he's doing, so if things get out of hand, you may need to leave.
We went to a big arts festival last summer when DD was about 16 months old, and we went early when it was less crowded, had a nice dinner, let her down to play in the tot section, and then she wanted to walk around the festival. 7:00 hit, and all of a sudden, they were slammed with people. DH followed her around while I shopped, and then I followed her around while he got desert, but it was so crowded that we were having a really hard time keeping track of each other and communicating and getting her to stay in one place to make decisions. If we'd both had cell phones, it might have been easier. It was so crowded that we finally just left. I was afraid that she was going to get stepped on. I ended up carrying my screaming and struggling toddler all the way out of the park. Then, she happily walked home.
From all the times she's walked around at festivals, I'd say it's reasonably likely that a point will come that things are out of hand and you need to be able to make a quick decision about what to do (step out and regroup, split and let one parent leave with him and the other go back and buy stuff, find a place for him to walk safely, leave completely, or something else). The part where I'm trying to talk to my husband about what to buy while my daughter is either running off or screaming because I'm holding her is what stresses me out. Planning ahead what should be done when you reach that point so that all you have to communicate is that you've reached it, and you know what you're going to do is really helpful.
It's great that you're thinking ahead about this. Planning ahead how to meet your child's needs will go far in preventing a lot of problems. You'll do great! Putting your cell phone numbers on his arm or back is also a great idea, not that you expect to need it, but just in case. Good luck!