The City of Sandwich and the Village of Somonauk both claim Lake Holiday, with the western banks of the lake being covered by Somonauk Fire Department/EMS and the Somonauk School District, while the entire eastern banks of the lake are covered by Sandwich municipal services (Fire/EMS, CUSD 430). Due to the community's location south of the LaSalle-DeKalb County Line, neither Sandwich Police nor Somonauk Police have any jurisdiction. Instead, the area is patrolled by local Security, which has limited authority, but for serious matters, the community is covered by the LaSalle County Sheriff's Department, which has a substation in the Northville Township Building, located a few miles to the south of Lake Holiday.
Both Lake Holiday and neighboring Wildwood (which sits across C.R. 3 from Lake Holiday), have been seen as a combined area, due to the amount of time the two communities have spent together. Lake Holiday was created in the 1960s as a lake resort community, which may have been a result of Sandwich draining a nearby lake for farmland around 1910. Wildwood was created at the same time as a modular home community just across the street, and starting in the early 1990s, an annex to Wildwood, known as "Wildwood South" or "New Wildwood" was created, and it was eventually finished around 2002. Both subdivisions share a gas station and a small retail area, with a restaurant having been built in 2006-2007 farther north, just south of the County Line.
Lake Holiday was created by damming up Somonauk Creek in 1965, on its continued path south toward its terminus into the Fox River, just north of Sheridan.