Holy Wood is a small region of coast on the Sto Plains, where the Circle Sea meets the Rim Ocean, about thirty miles Turnwise of Ankh-Morpork. It consists of nothing but sand, dead grass and driftwood (at first glance), this bleak location is the major setting for Moving Pictures.
The history of Holy Wood is very little known. It is apparent that there was a city there at some point, built around a rift in the fabric of reality (according to student wizard and moving picture star Victor Tugelbend). The rift seemed to be linked to the Dungeon Dimensions, and in a pre-emptive defence (or indeed, sheer bloody-mindedness) the Gods drowned the city. This is usually explained as the anger of the Gods.
Several surviving citizens were instructed by the guardian of Holy Wood to continue a daily routine of three prayers (Matinee, Evening and Late Showing) and record them in the Boke of the Filme to protect the world from excessive Holy Wood magic. As centuries wore on there were fewer and fewer priests, and then one day the last priest Deccan Ribobe died without having trained up (or indeed having even looked for) a successor. Without anyone reciting prayers to contain it, Holy Wood magic was again unleashed onto the world.
Many people were lured by it, gathering in Holy Wood; they felt compelled to be there. Many of these people were from Ankh-Morpork. It is possible that some of these new denizens were descendants of ancient Holy Wood inhabitants, who had escaped the city before disaster struck. These new inhabitants produced moving pictures with a fervor, going so far that even the infamous Ankh-Morpork merchant-venturer Cut-Me-Own-Throat Dibbler did not want to save the expensive sets of one movie for future productions.
After the re-awakening of the guardian, Holy Wood magic was brought back under control. The moving pictures industry died. The people left and the region of Holy Wood fell back into obscurity.