Is Liturgical Dance Ever Allowed?

The Congregation for Divine Worship addressed this question in 1975. After noting that there are cultural traditions in non-western Churches that could legitimately make a claim to incorporate dance into liturgy, this is not the case in the Latin Church.

However, the same criterion and judgment cannot be applied in the western culture.

Here dancing is tied with love, with diversion, with profaneness, with unbridling of the senses: such dancing, in general, is not pure.

For that reason it cannot be introduced into liturgical celebrations of any kind whatever: that would be to inject into the liturgy one of the most desacralized and desacralizing elements; and so it would be equivalent to creating an atmosphere of profaneness which would easily recall to those present and to the participants in the celebration worldly places and situations. (Notitiae 11 (1975) 202-205)

Outside of liturgy seems to be a bit of a gray area. While not encouraging it, the same document does not outright forbid it when it observes:

If local churches have accepted the dance, sometimes even in the church building, that was on the occasion of feasts in order to manifest sentiments of joy and devotion. But that always took place outside of liturgical services.

Outside of an official liturgy of the Latin Church it does appear there are limited circumstances where dance could be incorporated. It should have as its foundation a cultural tradition and be explicitly about devotion to a particular saint or feast.