1) Sanctification is a process of spiritual maturation that takes place over time through God's power, not our own efforts. It involves transforming all aspects of our being - spirit, soul, and body.
2) Holiness involves both separating ourselves from sin and dedicating ourselves to God. We are saved by grace, not works, but we are saved unto good works.
3) True holiness is a result of salvation, not a means of earning it. God demands an external witness of our internal holiness through good works.