Although holiday parties are to allow employees to relax and enjoy each other's company, you must remember that you are still in the present of people that will evaluate your behavior. How you act may determine how they see you and the level of credibility that you have with them. You should also be careful when drinking as many people feel the need to over express themselves or divulge information that would not necessarily come up in workplace conversations. You may also say things that could come back to haunt you later. It is best to be aware of your tolerance and abstain from overindulging. You do not want to act any different at the holiday party as you would while talking in the employee lounge.

While I think it is fine to have a drink or two at a social work gathering, drinking "heavily" is probably not a great idea. You do not want to do anything in the presence of other employees or your employer that you may regret later. I have seen co-workers, while drinking at parties, behave in ways that have caused others to lose some respect for them. In one circumstance I had a boss that embarrassed himself during a company Christmas party and it did cause his employees to view him differently. I would take your cue from the other employees and from the general atmosphere of the party. It is also important to know your limits and how you handle alcohol. If you are the type to climb on a table after a few drinks, you may want to stick to water.

Hi @abialy!

I am a mild drinker and I never drink more than two glasses of wine during company parties and other events in the office. And I always see to it that I drink on a full stomach so that alcohol won't make me feel to giddy for I have a tendency to be more talkative and laugh a lot when I have too much to drink. I think this is quite embarrassing when this will happen to me.
In a survey conducted by the Society for Human Resources Management, 501 Human Resources professionals were asked how drinking is viewed in their organization. They reported that drinking is acceptable 70% during holiday party, 40% at a meal with a client or customers, 28% when celebrating a company milestone, and 4% never.
They said to consider these factors when making a decision whether to drink at a company event:
*Take some hint form your company cultures and observe whether successful employees, managers, and executives drink at company events. If they do drink, a couple of drink would be OK.
*Another thing to consider is your knowledge about yourself and its effect on you. Does drinking one drink make you giggly? Does two drinks make you slur your words, lower your guards and maker you a chatter box? If these are all true, don't drink on company events.
*If you are not comfortable attending the party for some other reason, don't drink alcohol for this can further increase your anxiety.

As an employee or an individual, think of the effects of drinking too much on your relationships with your coworkers, your professional reputation, your manager's ongoing regard, office gossip and your own view of yourself. If you do drink, set your limit and stick to it. Never risk your professional reputations by drinking too much.

Source:
http://humanresources.about.com/od/networking/qt/drink_i3.htm