Dating back to 1932, “Tollywood” was the earliest Hollywood-inspired name, referring to the Bengali film industry based in Tollygunge, Calcutta, whose name is reminiscent of “Hollywood” and was the centre of the cinema of India at the time.

However, more popularly, Tollywood is now used to refer to the Telugu Film Industry in Telangana & Andhra Pradesh.

source: http://en.wikipedia.org/wiki/Bollywood