Vacation and Holiday are two different words that don't exactly mean the same exact thing... I use them individually when appropriate.
Vacation is an American version of holiday (well what a holiday to us British, when you go to somewhere else for a period of time, Americans still use holiday to mean time off work/school), so those places that speak American English will say Vacation, those that speak proper English will say holiday. I'm the latter.
Holiday is just what it is. A holiday - A special period of time. Examples of holidays: Christmas, Easter, Independence Day, Halloween, Thanksgiving. This isn't non-proper English. A vacation is something YOU make up. Examples of vacations: break from work, kids did good this school year so we will take them on a vacation to Disney Land, etc. Vacation is different from a Holiday!