Essentially, the question at hand is whether something is considered holy because it is loved by the gods or if that which spoken of is loved by the gods because it in itself is holy. The initial problem created is what is to be identified as holy. The gods willing something as holy would provide certain implications of what is expected of those who choose to worship. In other words, regardless of what a certain belief might entail, the people must follow it anyway simply because the gods will so. However, if the other end of the spectrum were to be analyzed, than that would mean that there is more to be considered in the matter of what is holy or not. In this case, the gods must have created their own supported system of classification and morals to adopt something as holy for it may have been holy anyway.
The conclusion that is drawn initializes a different perception due to the idea that there may be something held in higher regard than the opinions of the gods. The Euthyphro raises an interesting question from these two points. In the case of Catholicism, there are many sacred texts that lay out questions of morality in full detail to prevent dilemmas from occurring within one's soul. However, suppose the Ten Commandments were re-written as to say, " Thou shall kill." Obviously, taking the life of another is considered immoral in every sense, but if it were written in the scriptures then that would imply that God supports such behavior. Translate this idea to that which is raised in the Euthyphro and it is relatively simple to decipher what is really meant by the gods. The gods could essentially will anything as holy but that does not necessarily mean that it right.
Based on this idea, the theory that the gods support a belief because it is truly holy is the more feasible of the two schools of thought.