"Holder is of wrong Holding Type"

My understanding is that it means that the ruler's title does not correspond to the title of the holding.
Eg: Only Bishops can rule Churches, if you grant ownership of a Church to a Mayor, it's the wrong holding.

I believe you can solve it by creating a new vassal. Doing so certainly makes the popup go away.

You as a feudal ruler can only rule properly over castles.
The wrong holding penalty therefore comes up when you are directly in charge of a city or church.

The easiest way to deal with this is creating new random vassals for all the cities and churches you have conquered. To do this right click the barony in question and "create vassal".
You can of course grant the baronies via diplomacy to existing bishops and mayors.

Be careful, there's a bug. If you give your heir, for instance, a mayorship or lord-mayorship, he'll turn into a burgher, and when he inherits your realm it will break the game. All your titles will become open elective, as well as anything he takes himself while ruling, thus banning your own dynasty from inheriting and giving it to random courtiers. Oddly, it doesn't appear to end the game, so you'll play as these random, non-dynasty courtiers.
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Ruined my Munster game. I only fixed it by forming the Kingdom of Ireland before my he dies, thus turning everything to gavelkind and putting my dynasty back in.


It was kind of funny having an Irish duke with the title 'Doge', though!

I have a problem with this since I created a second city in Connacht. Anchory never shows up in the titles. Right clicking on it the button for the city is greyed out, and it says I can only create baronies in owned, minor baronies. Issue is I do own Anchory, its just always been part of the titles passed from ruler to ruler because I've never been able to actually create a lord mayor of it. I think it might be a bug.

I have that in the Republic DLC, approx. since I've changed the main crown from Republic of Genoa to Republic of Anatolia (I've gained a lot of land there during a crusade).
The cashflow is okey and my candidate for the next elections could be seen to the right (though his score is as if zero).
And no, changing back to Genoa as primary crown didn't help.