The translation 'what's going on?' is more accurate even though happening is the literal translation
Bear in mind it's Polish from Enlish and the best way to translate "What is happening" is "Co się dzieje". But of course, "co się dieje" is just as good translation of "What's going on". It all depends on the context.
So, I walk into a room, Have no clue what is happening, so I say this? Or is it an informal greeting, like, "Hey, dude. Long time, no see. What's goin' on?"?
No, the first one. Also maybe if you see that someone's in a strange mood and inquire why is that.