Short answer: Your sentence is okay, but a nicer way to say it is: What shape is the piñata?
Why?
- Start with a capital letter: What not what.
- End with a question mark: ?
- Both How is the piñata shaped? and What shape is the piñata? are correct. The second one sounds more natural.
- Tip: the Spanish word has a tilde: piñata. Many people also write pinata in English and it is understood.
Easy example answers:
- "It's shaped like a star."
- "It's shaped like a donkey."
- "It's shaped like a heart."
Try it: Look at a toy or a snack and ask, "What shape is it?"