Elf on a Shelf (Trademark) is a tradition whereby a toy elf is placed around the home throughout the Christmas period and posed in Christmassy situations. The elf is supposedly in the employ of Santa, checking the naughty or nice status of the children.
A firnd of mine does this for her children. every night she sets up another scernario and the children love getting up in the morning to see what the elves have done. One morning they found the elves had made snow angels (in flour). On another they were hiding in the Christma tree. There are so many inventive things that can be done.