Just to expand on what holiday means in the US. Here, holiday basically refers to any day in which a large amount of people don't work, or is otherwise a special day. Many of these are religion specific but there are other national holidays which are more historical days in American history or world history in some circumstances. For instance, Christmas or Easter are religious holidays, then there is Martin Luther King JR day and Independence day and such. Vacation usually refers to personal time away. This is especially true for traveling (Going on vacation). However, sometimes vacation will be used during extended periods of time away that would normally be just considered a holiday. For instance, winter break is often called winter vacation (or whatever religious occasion you associate it with) or for children during school there is summer vacation. Of course, keep in mind as Lee said the uses are different depending on which form of English you're speaking, though generally people will understand you either way.

Great explanation, Mytch ;-) *thumbs up*

This is an example of dialect. It is common to use "vacation" in the USA It is common to use "holiday" in the UK both mean "to travel away for some time". However I believe in the USA "holiday" is used to mean a religious event such as christmas or thanksgiving. In the UK "vacation" is the same as "holiday" but with different connotations or it can mean the process of leaving for example "the vacation of the building during the fire was quick and efficient.

Representing the UK!! WE dont really use the word the vacation ever. We use holiday in two contexts: 1. To go on holiday = 去旅游 2. To be on holiday = 放假 In these cases, holiday is a noun.