Originally this word has to do with the consecration of some object or person for use by the divine Reality. It is "given up" to that Reality, or set aside for transcendent use. Holiness, in this sense, is not moral perfection. Rather it is the consecration of an ordinary human being or object for sacred use.
the Holy Spirit's work of making us holy. When the Holy Spirit creates faith in us he renews in us the image of God so that through his power we produce good works. These good works are not meritorious, but show the faith in our hearts (Ephesians 2:8-10, James 2:18).