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Is it necessary that we use the word 'holiday' with a festival or occasion? Can we say 'Easter vacations'? Or there must be the word 'holidays', not vacations?

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I think it varies from a country to country. Also, some opine that holidays are declared by the authoritative body like offices, universities whereas vacations are customized, you may plan it any time. But then, that may not be the case in all countries.

As far as India is concerned, vacations, holidays both are in use, provided it is about festivals. We have Diwali vacations and Diwali holidays both. Even strange, vacations are from schools, and offices have holidays. That said, a son would have a Diwali vacation, and the father will enjoy Diwali holidays!

Hence, to answer, it depends on the regions. Let others may answer.

Worth to mention that searching on Ngram, the results of Easter holidays and Christmas holidays overweigh vacations.

When it is about some season, in India, vacation is more common. Say, Winter vacations. Winter Holidays don't go well.

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In British English, the word vacation is not used at all.

So a holiday is either a state-regulated day off - Bank Holiday Monday, Good Friday etc, or equally it is the two weeks you spend in Benidorm sunbathing & drinking sangria.

If you arrange to have a day off when you would normally go to work, then that's simply a day off [or week off, etc].

The UK also doesn't refer to such as Christmas as 'the holidays', it's just called Christmas or Xmas. The latter tends to be used by people trying to somewhat avoid the overt religious connotation, though there's no escaping it entirely.

There has been a move in recent years towards the term break, which is shorter than a holiday & might only be a weekend or Friday to Monday. I'm tempted to think this was pushed by advertisers trying to sell travel at under-exploited times, when the business travellers have all gone back home after their weekday travels.
So the 'City Break' was born.
Fly to Venice, Amsterdam or Paris on Friday night, spend 2 or 3 nights in a hotel, look round the city & be back in time for work.

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