According to Wikipedia the pooping man in many Spanish nativity scenes is called "Caganer".

What exactly is it?

It's a small figurine of a peasent man taking a poo, and he appears in many of the nativity scences across Spain. And these are not just any old scenes, they are often huge and involve many man hours to build.

The local one to me in Spain takes over the entire ground floor of a small church.

Click Here To See a 7min video of it.
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The pooping man is there, around the 5m 34s mark.