I think it's a real pity there isn't any other species capable of communicating abstract thoughts we humans would know of. As it is, we're incapable of understanding relationships between intelligent species. Take this discussion about evilness of blood races, for example.
Abysians sacrifice human females. Since they are a species of lava-people with only a superficial resemblance to humans (they're even made of something other than meat), it's a bit like we using bunnies for cosmetic study.
Jotuns sacrifice human females. Well, we use chimps and other closely related species for our own good, and how many actively think it's evil?
Vanheim gave up blood long ago, but the memory remains. Sure, situational ethics, but nothing like classical Evil...
(and so on)
And as to Holy, I think the personal belief and devotion angle is the most believeable one, especially since no pretender can achieve holy status (IIRC that was fixed around patch 2.06 or so
). And defining something by saying what they are not (UNholy) is a bit vague, especially since hardly anyone outside bad fantasy thinks of him/herself as evil/unholy or anything...