City Dance is back. The three-day festival presenting nine area dancing companies, which last year had audienced going gaga, opens next week at the Warner Theater.

More than 40 local companies were reviewed in performance, rehearsal and audition by members of a panel of 22 for possible inclusion in the '78 festival. Such an amazingly large number of companies, about 10 more than in '77, is further evidence of the dance fever that has become both a local and a national phenomenon.

This year's program promises to be as exciting as ast year's. Only three companies that performed in City Dance '77 will performed in City Dance '78. The others are new, some of them so new that they have received no critical attention to date. So there is a kind of anything-can-happen air to the festival this year. What makes City Dance so exciting is the diverse programming. The Washington Performing Arts Society deliberately mixed the programs so that ballet, modern, ethnic and jazz dances are juxtaposed. Audiences accustomed to a single kind of fare have an opportunity to sample a variety, with the likely prospect of making some pleasing discoveries.

Besides being a showcase for the area's dance talent, City Dance also represents a commitment to the cultural life of the downtown area. A substantial number of area businesses have joined with the Washington Performing Arts Society, the National Endowment for the Arts and the Truland Foundation to make it all possible.

While last year's festival included two days of performances for more than 7,000 schoolchildren, this year's has substituted two days of performance (May 9 and 10) by the Children's Opera Theater and the D.C. Youth Orchestra. The entire project - City Dance and the opera performances - will employ about 200 area artists for a day or more, and that's a feat in itself.

Opening the program Thursday will be the Washington Ballet, directed by Mary Day, with "Fives," which has been hailed as a choreographic milestone for Choo San Gob, the Singapore native and resident choreographer of the Washington Ballet whose work has been receiving increasing critical attention and acclaim. The piece is performed to Bloch's Concerto Grosso No, 1 for string orchestra.

Next on the program is Greg Reynolds and Dancers performing Reynolds' "The Passion According to Mary" to music from Vivaldi's synfonia to B. minor. A former member of the Paul Taylor Dance Company, Reynolds was born in Anacostia and now choreographs and performs in Prince George's County.

The Laverne Reed Dance Company will conclude the first evening with two pieces, "We the people" to music by Graham Central Station, and "Sweet Lucy," a premier, Reed, resident choreographer at Howard University, formed her company from students of Howard and the Ellington School for the Arts.

Diverse enough for you? Due for Friday are a modern dance group, a tap dance and an African ethnic dance group.

Opening the program is Liz Lerman's Dance Exchange performing "Elevator Operators and Other Strangers" to live music by Wyn Meyerson and John Ramo, Lerman often includes a group of senior citizens from the Roosevelt Hotel in her dances.

Next is an entr'act tap dance by the Richard Cunningham Dances by Choreo 18, the Capitol of Ballet and the Cole-Har is only 20 years old.

Melvin Deal's African Heritage Dancers and Drummers will then take the stage. Resident in Washington for more than 10 years, the company is perhaps best known by students of th e D.C. public schools. It will be performing "Fertility Nuptial Suite," a set of four dances.

The festival winds up Saturday with performances by Chorse 18, the Capitol of ballet and the Cole-Harrison Dance Company.

Choreo 18, modern dance company of the Jewish Community Center of Greater Washington, directed by Midge Kretchemer, will perform "Street Song" by Jean Isaacs to music arranged by Carl Orff and "Truck Farming in Suburban Maryland" by Cathy Paine to music from "Tater tate plays Bluegrass."

The Capitol Ballet, directed by Doris Jones and Claire Haywood, will perform two pieces choreographed by Jones: "Ebony Concerto" to music by Stravinsky and "Jazz pieces," is "to music by black composers. According to the advance publicity, the dance style of "Jazz Pieces" is "jazz movement on pointe ". Appearing for the second time in City Dance, The Capitol Ballet is noted for its ability to bring together diverse styles of dance, but the emphasis is on classical technique and training. Founded in 1964, it boasts such graduates as Emmy Award-winner Louis Johnson, who recently choreographed the movie version of "The Wiz."

The Cole-Harrison Dance Company, directed by Philip Harrison Cole and Edna Lee Long, plans to perform five works including "Images," choreographed by three company members to music by Cato Barbieri, and "Love Theme," choreographed by Tom Kelley to "Evergreen" sung by Barbara Streisand. Long is the director of the dance program at the University of the District of Columbia.