A fairground organ is a pipe organ

Pipe organ

The pipe organ is a musical instrument that produces sound by driving pressurized air through pipes selected via a keyboard. Because each organ pipe produces a single pitch, the pipes are provided in sets called ranks, each of which has a common timbre and volume throughout the keyboard compass...

 designed for use in a commercial public fairground

Funfair

A funfair or simply "fair" is a small to medium sized travelling show primarily composed of stalls and other amusements. Larger fairs such as the permanent fairs of cities and seaside resorts might be called a fairground, although technically this should refer to the land where a fair is...

 setting to provide loud music to accompany fairground rides and attractions. Unlike organs intended for indoor use, they are designed to produce a large volume of sound to be heard over and above the noise of crowds of people and fairground machinery.
As fairgrounds became more mechanised at the end of the nineteenth century so did their musical needs grow.