A business and residential district in the city of Los Angeles, the core of Hollywood for a tourist is its three fascinating boulevards: Sunset Boulevard, Hollywood Boulevard, and Melrose Avenue. All three are worth seeing. Hollywood Blvd. is known for its entertainment history; Sunset Blvd. for its clubs and nightlife; and Melrose Ave. for its shopping, nightlife, and eclecticism.
Hollywood was founded as an independent city in 1903 and voted to merge with the City of Los Angeles in 1910. That same year also saw the birth of the Southern California motion picture industry when D. W. Griffith relocated his Biograph Company, sparking a westward migration of East Coast filmmakers. As movies exploded in popularity in the 1910s and '20s, the name Hollywood became synonymous with "the Industry." In the decades following World War II, Hollywood's glitz and glamour began to fade as most of the leading film studios moved to other places.
If you want to see celebrities, pack your patience or be prepared to play the role of boulevardier. The chances of bumping into a celebrity are very low, because most of the celebrities who live in Hollywood usually do not go out in public and they are not going to risk causing a mob scene by casually strolling along tourist-packed Hollywood Boulevard (unless heavily disguised). If you want to bump into a celebrity, you would probably have to do a lot of "hanging out" at expensive restaurants in Beverly Hills, on Sunset Plaza, or in Malibu.
You can easily see where they live by taking a tour or buying a star map for about $10. You might also try the Book Soup bookstore or the Viper Room bar, both on Sunset Blvd. in West Hollywood, or a number of other locations in the area where the stars live their day-to-day lives.