Basically the parents buy this elf doll. They put it somewhere on in their house. Then they tell their kid to be good for all of December, because this little elf is in your house. The elf is watching everything you do, and reporting back to Santa. But you can’t touch the elf, because when humans are around, the elf has to stiffen up, and pretend to be a doll. If you touch the elf, or move him, he doesn’t like it, and will tell Santa to skip your house on Christmas. So it’s a big deal that elf on the shelf never be physically touched or picked up at all.

Then when the kids leave the room, the parent moves the doll while the kid is away. The kid comes back, see’s the doll moved to the other side of the room, and when the kid asks about it, the parent says “Hmmm? No, I didn’t touch him. He must have just moved over there when we left the room. Don’t touch him! He wants to be over there now.”

So the idea is, you now have this magical creature who runs around seemingly with Toy Story rules, except touching him ruins Christmas. Then I come in and IMMEDIATELY grab him, because all I see is a toy. In my mind I was just happy to play with my niece and was instead met with a full on breakdown.