The attraction at the city's Campbell Park, which included paid-for events such as ice skating, opened on Saturday (14 Dec) and was supposed to run until 22 December.
However, a flood of complaints on the first day led to the event being closed down, with disgruntled visitors venting their anger on social media.
Visitor Anne-Marie Smith wrote on Facebook: "It was meant to be a big shared event and people were expecting good things and a memorable experience. I keep thinking it's a bad dream."
The Milton Keynes Citizen newspaper had run an article online describing a "magical winter festival has opened for the first time in Milton Keynes today offering attractions such as an ice skating rink, circus, husky dogs".
Following the complaints about a lack of activities, unconvincing Father Christmas characters and poor standards, the event closed yesterday.
Band Special Kinda Madness had been booked to play at the event on Friday (20 Dec), but keyboard player Mike Busby told Event the gig had not been promoted a week before the band was due to play.
"That gave us some concerns, and we are disappointed that our fans won't be able to see us," said Busby, whose band will return to play a gig in Milton Keynes in February.
Meanwhile, the Milton Keynes Parks Trust, which runs Campbell Park, said in a statement: "We are very sorry to hear that some people have had such a disappointing experience at Winter Wonderland MK.
"We have been in touch with the organisers of Winter Wonderland MK who have advised us that regrettably they have now cancelled this event. Winter Wonderland MK has told us that they will be contacting all the customers on their database to arrange refunds.
"Before The Parks Trust hires out any sites out to third parties we do ensure that organisers have robust health and safety policies, are fully insured and have a detailed event management plan in place. We also liaise with the local authority and the police through the Safety Advisory Group. We are saddened that Winter Wonderland MK did not meet some customers' expectations."
Winter Wonderland Milton Keynes did not respond to Event's questions at the time of going to press, but organiser Lorenzo Franco claimed to BBC Look East that 200 people had been refunded.
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