Holiness refers to being set apart for God and living in a way that honors his righteous and pure nature. The document discusses holiness in the Bible and defines it as separating oneself from the world in order to seek God through his grace, rather than legalism. It warns against two extremes: that holiness is only external actions, and that grace means our actions don't matter. True holiness involves both God's grace and human efforts to purify ourselves before him.