Meaning: This sentence describes a group of people engaging in an enjoyable activity in an area set aside for children to play.
Choice of Words: The word "They" is a pronoun that refers to a group of people. "Play" is a verb that describes an activity done for enjoyment. "Happily" is an adverb that indicates a state of joy or contentment. "In" is a preposition that indicates a place or location. "Playground" is a noun that refers to an area set aside for children to play.