King James was the sponsor of the first officially sanctioned (by the British Crown) translation of the bible into English. The Catholic Bible, the Vulgate, was in Latin. One of the big things about the Reformation was that the Protestants did not believe that someone else, a priest, should stand between a man and his God. Unfortunately, since there were no approved English Bible translations, and not everyone who could read English could read Latin all that well, this was a fine principle without practical use, since they'd need someone who could read Latin to translate and interpret it.
There's nothing so specially holy about the King James translation; it's just that people love the archaic language. There are plenty of places where its translation is considered questionable.