The elf on the shelf is a popular holiday tradition where a small elf toy is placed in a household to watch the children's behavior and report back to Santa Claus. The elf moves around the house each night, watching the children's behavior, and is a fun way for families to get into the holiday spirit. Some elves are even dressed up in cute outfits and placed in different spots each day, adding to the excitement. However, it is important to note that the elf is not real, but rather a toy that is used as a fun way to teach children about kindness and good behavior during the holiday season.