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Þau halda upp á jólin.

Þau halda upp á jólin.
They celebrate Christmas.
From Lesson 141:Að sækja um vinnu — applying, joining in, celebrating·Icelandic

Breakdown of Þau halda upp á jólin.

þau
they (n)
jólin
the Christmas
halda upp á
to celebrate

Questions & Answers about Þau halda upp á jólin.

I thought halda meant 'to hold'. Why does it mean 'celebrate' here?
You are right that halda usually means to hold or to think. However, when it is combined with upp á to form the phrasal verb halda upp á, the entire phrase translates to 'to celebrate'.
Why is the word for Christmas written as jólin?
The base word for Christmas in Icelandic is jól, and it is treated as a plural neuter word. The -in at the end is the plural definite article (the word for 'the'). So, Icelanders literally say they celebrate 'the Christmases'.
Why is Þau used for 'they' instead of Þeir or Þær?
Icelandic has specific pronouns for groups of all males (þeir) and all females (þær). Þau is the neuter plural pronoun. It is used whenever a group includes mixed genders or when you are talking about people in a general sense.
What grammar case is jólin in this sentence?
It is in the accusative case. The preposition á forces the word following it into the accusative case in this specific phrase. Because jól is a neuter word, its accusative plural form looks exactly the same as its base nominative form.

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