In Saxon times and in the Middle Ages, days were long and hard for craftsmen and peasants alike, who laboured from sunrise to sunset. The regularity of their existence was periodically interrupted by Church feast days which were set aside for religious celebration instead of work. The Old English word for a day of religious observance was haligdag, literally ‘holy day’, a compound of halig, ‘holy’, and dceg, ‘day’.This became halidai or halliday in Middle English. Of course a day off work is always welcome, whatever the reason. Holy days were eagerly awaited and were often marked by festivities and fairs. By the fourteenth century, the use of halliday simply to denote ‘a day off work’ was beginning to creep in, and during the sixteenth century was regularly used in this way.
Doo you not knowe that it is a holliday, a day to dance in, and make mery at the Ale house? writes Barnabe Googe in his translation of Heresbachius’s Foure Bookes of Husbandrie (1577).
For this reason, since the sixteenth century, an effort has been made to use holy day to denote ‘a religious festival’ and holiday for‘a day of leisure’.