To cancel an event, simply access your invitation and click on "Edit Invitation." Once you click on this option, the link to "Cancel Event" will appear to the left of it. You'll then be asked to confirm the cancellation and will have the option to send an update to your guests regarding this change.
Your guests will still have the invitation email they received when they were added to the event. When they click on "View Invitation," they will be informed that the event has been canceled.