When it comes to child custody, there are two very important phrases to know: physical custody and legal custody. Many people may think these two child custody principles are the same (or are similar), when in fact they are very different. Physical custody is a principle that governs how the daily activities and needs of a child are taken care of, including where the child will live.
Physical custody can either be "sole" or "joint"; the former granting one parent physical custody, and the latter meaning the parents share physical custody. Some other provisions will have to be worked out if joint physical custody is agreed (visitation, schedules, holiday planning, etc.).
Legal custody, on the other hand, grants a parent the right to dictate how a child is raised; what religion he or she will practice; where they go to school; and other developmental choices. Again, legal custody can be shared between the two parents, or it can be given to one parent.
As you can tell, legal custody is a very important legal principle that holds great importance -- especially around the holidays. For example, say you don't want your child to be brought up believing in Santa Claus. You may come to this decision because of religious reasons, or because you simply don't want to teach that story to them. The reason can be personal -- but in any case, you would need to have legal custody in order to have the grounds to make such a decision for your child.
Source: Wonder Woman, "Let your child believe in Santa," Jane Gopalakrishnan, Dec. 2, 2013