Can it mean that she returns from her vacation or is it implying that she returns a book etc?
It can be both.
Would "γυρίζει" be ok?
It would be, yes. Although I must say, "γυρίζω πίσω" would be a better translation to "return". ^.^
I'm afraid "επιστρέφομαι" is the passive version of the verb, and means "be returned", so it's not a valid translation. ^.^
Is the boomerang επιστρέφει or γυρίζει?