it is not always plural at all, although it is when referring to the whole period around the day itself when there is no school/work. if you only have the day itself off it is a holiday.
and you go on holiday, not on holidays unless you go more than once. I think dream about a holiday ought to be accepted.
Now it allows "holiday" but not "holidays".
I know it wants plural, but "holidays" is the normal measure of time, it's an abstract concept and it doesn't work like "vacation".
You go "on holiday", but you think "about holidays", thinking "about holiday" is like thinking "about dog", it's unnatural. You can think about "the holiday" or "a holiday", but in the context she's clearly thinking about the abstract concept of "holidays" in the same way you think "about time".
I love British English and the way it sounds but it seems that Duolingo takes American English as the main as you can see if you take an English course from another language. The flag is the US and it is the same with Portuguese with Brazil flag and the upcoming Korean with S. Korean flag.
However, there should be an option to the meaning in British English too! :)
i think for me and for most Russians(i dare to type it xD) it's the same...Otherwise, when else how on holiday can you go to warm countries and have a rest? Of course you may go somewhere else(relatives' place) or nowhere(home, club,gym,etc). I would say holiday or vacation = to travel somewhere... (sorry if my grammar bad)
"Anna often dreams of holidays" is still marked as wrong. You CANNOT say "Anna often dreams of holiday" It's wrong because "holiday" is a not a mass/collective noun. "Anna often dreams of beer/cheese/space travel/zookeeping etc" are all OK, but you'd have to say "Anna often dreams of a holiday" to keep it singular. I don't know why people persist in saying things which are wrong are not wrong
"dreams about vacation" or "about the vacation" is not really typical. Anybody I know would say "she dreams about her vacation". We have been told that Russians do not always use a possessive pronoun, so I thought "her vacation" would fit. Even without the possessive, can't we asume she is dreaming about her own vacation here, instead of "vacation" as a general idea (which probably nobody ever dreams about)?