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I beleive there are two possibilities

According to the DRAE

felicitación
1. f. Acción y efecto de felicitar.
2. f. Tarjeta postal, telegrama, etc., con que se felicita.

and:

enhorabuena
Tb. en hora buena en aceps. 2-4.
1. f. felicitación (‖ acción de felicitar). Les dimos la enhorabuena por la victoria.
2. adv. Con bien o con felicidad.
3. adv. U. para denotar aprobación o conformidad ante lo que se enuncia.
4. interj. U. para felicitar a alguien.
de enhorabuena
1. loc. adv. En situación afortunada o feliz. Estamos de enhorabuena porque ha nacido el primer nieto.

The motivation for my question is seeing a couple standing outside Málaga town hall who appeared to have just got married. Should I have called out ¡felicitaciones! or ¡enhorabuena! or would that have been inappropriate? In fact as it turned out as we walked along it became clear that they were part of a photo shoot so neither would have been a good idea. It looks from the definitions that enhorabuena would be better. Is that correct?

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    In Chile the word enhorabuena simply does not exist. We only use felicitaciones and almost always in the plural. On the other hand, the word parabién was also widely used until a few decades ago. – Rodrigo Nov 20 '16 at 13:07
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    I would like to add felicidades, as it is used in Spain as a synonym for enhorabuena. – Charlie Nov 20 '16 at 14:18
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    In Mexico enhorabuena doesn't exist either. We use felicidades mainly. – Jaime Nov 23 '16 at 16:32
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I will concentrate on usage in Spain, not just because you are talking about Málaga, but also because this is the one I know.

First, in Spain we do not use ¡Felicitaciones! to congratulate; we would use ¡Felicidades! instead. I know @fedorqui's quote makes a difference between these two expressions, but we just never use ¡Felicitaciones!, though this expression is very usual in many other Spanish speaking countries.

As for the difference between ¡Felicidades! and ¡Enhorabuena!, they can be used interchangeably in many cases, but not always. ¡Felicidades! is just a wish for happiness. You can use this whenever something good happens to someone. ¡Enhorabuena!, on the contrary, implies a congratulation for a work well done.

This work can be almost anything. For instance, you could have used it at the wedding in Málaga, implying that you congratulate the newly wed for having carried their relation to this point when they get married. But you would not say enhorabuena at a birthday; just staying alive does not really qualify. Once again, you can use it for a wedding anniversary, again implying that you congratulate the couple for having overcome the usual problems in a relationship this far.

So, in summary:

  • ¡Felicidades! is a wish for happiness on some special occasion.
  • ¡Enhorabuena! is a congratulation for a good work from which you are now reaping the rewards.

But don't read too much into this difference. In most cases, both expressions can be used interchangeably.

2

Since you are mentioning Málaga I will focus in the Spanish from Spain.

Here, in such situations we use ¡enhorabuena! or (as Carlos Alejo pointed out in comments), ¡felicidades!.

To my knowledge, felicitaciones is used in South America, but I don't know exactly where. I do know that in Colombia you get a lot of felicitaciones for your birthday, for example.

I found an interesting digression on the topic Two kinds of congratulations… and how Spanish expresses them:

Many English speakers (and even some native Spanish speakers) confuse this interjection with the similar-sounding “¡Felicitaciones!” English routinely expresses both ideas by the single word: “Congratulations!”

The distinction is significant: felicitación is an act of praise or congratulation, while felicidad refers to that sublime and blessed state of the human heart, happiness.

Thus a graduation, a promotion, an award, indeed any achievement or victory, merits a congratulatory “¡Felicitaciones!” (An alternative particularly common in Spain: “¡Enhorabuena!”)

On the other hand, transcendent moments of the human condition, the annual cycle, or the great life passages—the birth of a child, a birthday, a wedding, or, indeed, a New Year—inspire the warmer and more elevated “¡Felicidades!”: a wish for much happiness.

I don't specially agree with it, but it may well be because I fail on what is said in the beginning of the text and I see enhorabuena as something correct for such circumstances.

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    Thanks for that interesting answer which tied with @Gorpik for the magic tick so I used the British tradition of giving it to the underdog (the one with the smallest reputation). – mdewey Nov 22 '16 at 9:34
  • Haha @mdewey I totally agree with your decision. But not for being the underdog, but for giving more details and insight. I would've done the same. By the way, thanks for teaching me the concept of underdog :) – fedorqui 'SO stop harming' Nov 22 '16 at 9:47
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    When we run short of questions it looks like I should ask what underdog is in Spanish then. – mdewey Nov 22 '16 at 16:57

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