It is based on the real-life Hollywood area. It has full emergency services coverage, its own fire department detachment, and the LAPD 12th Precinct is located here.
The gag references the actual "HOLLYWOOD" sign, which originally read "HOLLYWOODLAND," which was the name of a housing development it advertised, before "LAND" was removed by the city of Los Angeles.
The name is a recurring gag in the series, where everyone says Hollywoo, instead of Hollywood after the events of Our A-Story is a "D" Story.
It was called Hollywood for the first six episodes, before the previously mentioned events of Our A-Story is a "D" Story.
- Prior Say Anything, during the intro sequence, the sign in the background would indeed say "Hollywood."
- In the episode Ruthie, in Princess Carolyn's fantasy, which took place millions of years in the future, the "Hollywood" sign was still missing the "D" after all that time.