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How does using “Hollywood” refer to the film industry?

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Louisa May Alcott: Little Women — figure of speech Front cover of Louisa May Alcott's classic novel *Little Women*.

Using "Hollywood" to refer to the American film industry is an example of metonymy, a figure of speech in which a term closely associated with a concept is used to represent the concept itself.12

Because the American film industry became heavily concentrated in the Hollywood district of Los Angeles during the early 20th century, the name of the location became synonymous with the industry as a whole. By 1915, more than 60 percent of American film production occurred in the area, and the presence of major studios solidified its status as the industry's capital.3

Much like using "White House" to represent the President of the United States or "City Hall" to refer to municipal government, "Hollywood" serves as a shorthand that replaces a broader, more complex entity with a specific, recognizable place associated with its operations.12