That tech is used a lot in the amusement industry. It's just what you think it is, a VERY bright and high-powered projection system. The coolest part is that the lighting doesn't need a screen or even a flat backdrop. If it's dark enough around the surface, the projectors are powerful enough to literally map pixels 1:1 to the surface they will hit.
Disney does a fantastic job with this on their Magic Kingdom Castle:
https://www.youtube.com/watch?v=HhV1LGw3A9U
Efteling has a really nice show as well
https://youtu.be/eY19CqUbsm0?t=261
Some folks doing a LEGO castle:
https://www.youtube.com/watch?v=Xa_F9K50uj8
Wouldn't need to be nearly as complex for our stuff, but throw distances get kinda small and the shadows from existing model rr buildings and trains can be an issue.