How do you interpret interaction terms between two categorical variables if Y is significant, Z is not significant, but Y*Z is significant. Do you include the interaction term in the model, or do you eliminate the variable that is not significant (in this case Z) and therefore also the interaction term?
Keep both the interaction term and the main effects.
Because Z influences the model both through the main Z term and the interaction term Y*Z, it's not very meaningful to look at the significance of the main effect on its own. See for instance this answer:
If the interaction is significant, interpreting either main effect, whether significant or not, is basically pointless (and misleading). The reason is that when $A$ and $B$ are involved in an interaction, the coefficient for $A$ is the effect of $A$ when $B=0$; in other words, the effect is conditional on the value of $B$, and is not a main effect. Similarly, the coefficient for $B$ is the effect of $B$ when $A=0$.