Lollywood refers to the Pakistani film industry, based in the city of Lahore. The name is a conflation of "Lahore" and "Hollywood".
During the 1930s the movies made in Lahore were under the influence of Hollywood movies, not just in the stories or action or drama but the acting, the makeup and the costumes as well.
The heroes would appear like Douglas Fairbanks or Errol Flynn.
The reason for this is noted to be the fact that Lahore tried to establish its own identity separate from that of Bombay, India at that time.
First Pakistani Film:
On 8th of August 1948 first Pakistani movie, Teri Yaad premiered at Parbhat, Lahore. It starred Asha Posley, and Nasir Khan who was Dilip Kumar's brother. Credits: music by Nath, produced by Divan Sardari Lal, and directed by Daud Chand.