What does rail passholder mean?

The "passholder fare" is not a train ticket - it's just the seat reservation fee for people who already have a rail pass of some kind. A person with a rail pass is, then, a rail passholder.

If you have a rail pass, all you need is a reservation - the rail pass is your ticket. If you do not have a rail pass, you must buy a ticket and (for some trains) a reservation as well.