No they are not forced to kill eachother.
The rituals are performed by the leaders and saccrifice is sacred to these sick fuckers.
They make the kids watch (look at the kids sitting on the black thing, hands are frozen in terror, and have been for a while. They are transfixed and intently watching what is happening).
If you look into Krampus, this is correct that they "punish" ill mannered children.