Holy is an Elemental Damage type introduced in Diablo III, typically associated with white or golden color. It refers to divine power of Light, and is mostly used by angels, followers of Zakarum faith or by priests of other gods. In game, only Crusaders and Monks use this damage type. Previously in Diablo series, this damage type was part of Magic Damage.
For resistance purposes, Holy and Arcane count as single resistance, to compensate for very few monsters being able to use Holy attacks. One such monster is Raiziel.
All Holy skills also destroy corpses of slain enemies (even if they do not land a Critical Hit), being the only damage type with guaranteed corpse destruction. This property, however, is suppressed if there are reanimator monsters nearby. Holy skills cause the target to vanish in the flash of bright light, leaving nothing behind as if they were vaporized completely.
Originally it was believed that Holy damage would be especially deadly to Undead, but in game, it has not been fully implemented. In return, many Holy skills Blind target or heal the caster.
Lidless Wall, Stone of Jordan, Andariel's Visage, Akanesh, Golden Scourge, Skycutter, Swamp Land Waders and Hallowed Barricade are the items with unconventional bonus to Holy skills damage. Countess Julia's Cameo amulet will render the character completely immune to both Holy and Arcane damage (the attacks will actually heal the Nephalem).