Calming the Nerves
Practice
Practice is not only a time to work on songs, tone, and jamming. You should also use it for gig preparation, working through checklists, playing through setlists, and working on stage performance (eyes, face, body movement). It should be viewed as a "free" gig, escaping any external judgment as to both song content, tone, and performance, and costless to find unforeseen issues. If you practice as though you are actually playing the gig, you may discover how to work out stage constraints, fatigue, pace, and performance issues that you wouldn't have noticed.
Not only does practice make perfect, it also build confidence. If you can play a gig perfectly at practice, you know it's possible to do it in front an audience of any size.
Experience
Ultimately, the best way to get good at something is to do it over and over again. Getting more and more gigs under your belt will make the experience less intimidating and mystifying. This can be open mic nights, playing in a friend's band, performing in front of friends/family, and subbing in for a night with another band, in addition to gigs with your band. You can even try to get your band small, low-pay bookings just to "test drive" some gig situations.
It's a good idea to have someone video or even just record the audio of your performance. This is useful to review to see what you did and didn't do well. These can be cues to work harder on those things at both practice and the next gig.
Work Up to the Big Gig
You don't want to work hard for months, book a big gig, and perform miserably, tarnishing your reputation and killing morale. Rather than practice and practice, make a demo, and try to book a big venue, work up to the big gig. Play some open mics and small-scale venues to remove some pressure and develop experience at a comfortable pace. You can even try to play in other groups or sub in for gigs - this can help develop stage experience quickly. And for some people that's less intimidating - when you're playing someone else's material, you should feel less anxious about crowd reaction/judgment.
If you have a bad gig, don't let it kill morale - it's just a stumbling block. You know that you were already successful at a smaller level. What went wrong this time? Video or feedback from audience members can help distinguish what to work on at practice and concentrate on at the next gig. Also, was the source of your failure your nerves, a preparation or hardware failure, or some random environment factor? If the problem wasn't nerves and something that can be corrected, feel confident to keep pushing forward with your ambitions and the size/prominence of your gigs.
Mental Focus
Looking out at the crowd can be very intimidating. While connecting with the crowd is part of a good performance, it's also important to play well. The intimidation and fears cause you to lose focus. You keep thinking about freezing up, making a mistake, what people think about you. Focus on your instrument, the songs, the notes, your bandmates. Maybe even close your eyes, pretend you are at practice. Think of all the things you already associate with the song you're playing - what drew you to write it, why did you choose it for your setlist, or what does it make you feel? Feeling that inspiration can send the notes rushing back to you and the passion to play them with confidence.
Drugs and Alcohol
Ultimately, I recommend experience, preparation, and mental exercises over this approach; however, it can assist to get over the initial hump for the absolute novice whose nerves would otherwise be far worse for the performance. A drink or two may help calm the nerves. Once gaining experience, however, you should transition away from it.
Do not rely on drugs and alcohol as a crutch to perform. Getting in the routine of getting high/drunk before a show, even slightly, can condition you to think its required. As you gain skill and stage confidence, you may not need it all; but the habit of it will make you think you do. There are times where it won't be available, and you don't want its absence to add to your nerves. Also, you don't want drugs and alcohol to creep into your life beyond your desired occasional recreation.
Another problem is that intoxication often has adverse effect on your playing ability. It can also disorient your perception to make you think that your playing is better or unaffected when intoxicated. It's easy to jump from one drink to feel loose to four drinks and being drunk. If this is going to a method to deal with nerves, you have to be sure it won't hurt your performance. Plan ahead - try getting intoxicated when you practice (but not every practice - again remember to not become an addict), playing through entire songs as you would during a gig. Record yourself on a phone or video camera and verify that your performance is as good as you thought it was.