It's a subordinating conjunction in this sentence.
http://grammar.ccc.commnet.edu/grammar/conjunctions.htm#subordinating_conjunctions
It's better not to use "where" here because you're not referring to a place; you're referring to more of a time.
A sleepover is a type of party when several young people stay for the night at a friend's home.
(What is the part of speech of 'when'? Is 'when' a conjunction or a relative adverb? Can we use 'where' instead of 'when'?)
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