Diagon Alley is the main commercial centre for Wizards in the British Isles; a sort of national shopping mall, if you wish. It is a place obscured from view somewhere in the City of London. Mind you: the City of London, because Greater London was more like the neighbouring city of Westminster sprawled around the original settlement of London, which is in fact a separate entity with its own mayor. (For the City of London vs greater London, see the videos of CGP Grey.)
One of the main moments in Harry Potter and the Philosopher’s Stone constitutes the first entrance of Harry Potter into the world of wizards: the Leaky Cauldron and Diagon Alley. Known facts: the Leaky Cauldron functions as a first threshold. Behind the leaky Cauldron is a brick wall facilitating access. Behind these two lines is Diagon Alley, proper and all of the miscellaneous streets associated with them. That basically means that there is only one main point of entry except via flooing in and apparition.
Once a magical suppression field of some sort sets in, the whole place will collapse, descend into chaos, and thousands of wizards will die. I will not use higher numbers because I simply refuse to believe there are more wizards than a few thousand at any given time in Diagon Alley. (As I also explained in “Harry Potter and the Lack of Wizards”) Anyone who can demonstrate larger numbers in a sensible way from the given quantities in the books is welcome to do so, however. In his/her own rants about Harry Potter, or in the comments section below.
So, this still means there is a main source of wizarding activity crowded together negating a proper use of space the muggle way, that is, with only one exit and entrance. Once the magic goes away, this is all that remains. Though there were larger numbers involved in the Love Parade a couple of years ago, I believe something similar will occur, with a lot more deaths because of a smaller space in use and a larger relative number of wizards passing through and a lot less common sense.
Remember, these people have been in complete seclusion since 1694. That means no developments were made on the area of philosophy, psychology, or almost any field of science. Things are likely to aggravate, as Diagon Alley does seem to be near the city centre, but not accessible by air. Given, in motion picture 7.1, Death Eaters gained access through whatever they did, but they were still only metres off the ground. In any case it becomes very clear that it is a small miracle the Boy-Who-Lived wasn’t hugged to death by all those present in the Leaky Cauldron upon the moment he was sighted for the first time in ten years. Likewise the deathtrap analogy works just as well with Gringotts and other establishments keenly visited. So, where are we now? This is where the magic happens.