I had a few people respond to "Happy Holidays" by forcing the issue and asserting MERRY CHRISTMAS. These people were strangers who did not know me or the people I was sitting with. To one of them I finally said WE SAY HAPPY HOLIDAYS BECAUSE NOT EVERYONE IS CHRISTIAN.
Happy Holidays can encompass Thanksgiving, Christmas, Boxing Day, Hanukkah, Kwanza, and New Years Eve and New Years Day. It can be said to strangers who you know nothing about when it comes to religion or spiritual beliefs including non-believers, doubters, and pagans.
If you are surrounded by people at your church or family whom you know to be believers in Jesus, by all means say Merry Christmas. You won't insult anyone or come off as rude.
Etiquette is meant to allow or make other people feel comfortable.
