To insert a holiday, open the Planner window and right-click on the day to have the holiday. Select New->Holiday... from the popup menu and fill out the details (see the Holiday Editor Window).
To Edit an existing Holiday, simply double-click it, or choose Edit Holiday... from the popup menu.
Holidays cannot be overridden, that is, if a class has been set to Observe Holidays, then in the Attendance Window the class cannot be reinstated: