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When Spanish explorers first entered the area now known as Hollywood, Native Americans were living in the canyons of the Santa Monica Mountains. Before long, the Indians had been moved to missions and the land which Hollywood now occupies was divided in two by the Spanish Government. Acreage to the west became part of Rancho La Brea and settlements to the East became Rancho Los Feliz.

http://www.thehollywoodmuseum.com/
By the 1870s an agricultural community flourished in the area and crops ranging from hay and grain to subtropical bananas and pineapples were thriving. During the 1880s, the Ranchos were sub-divided. In 1886, H. H. Wilcox bought an area of Rancho La Brea that his wife then christened "Hollywood." Within a few years, Wilcox had devised a grid plan for his new community, paved Prospect Avenue (now Hollywood Boulevard) for his main street and was selling large residential lots to wealthy Midwesterners looking to build homes so they could "winter in California."

Prospect Avenue soon became a prestigious residential street populated with large Queen Anne, Victorian, and Mission Revival houses. Mrs. Daeida Wilcox raised funds to build churches, schools and a libraryand Hollywood quickly became a complete and prosperous community. The community incorporated in 1903, but its independence was short-lived, as the lack of water forced annexation in 1910 to the city of Los Angeles, which had a surplus supply of water.

In 1911, the Nestor Company opened Hollywood's first film studio in an old tavern on the corner of Sunset and Gower. Not long thereafter Cecil B. DeMille and D. W. Griffith began making movies in the areadrawn to the community for its open space and moderate climate.