Godric's Hollow was named after Godric Gryffindor and was his birthplace as well as an important home and setting to other characters in the books. It is a moor in a small West Country Village, later on known to be in the West Country of England, although the exact location is only speculated and never placed.
Along with Godric Gryffindor, Albus Dumbledore and his family also called Godric's Hollow home. James Potter also came from Godric's Hollow, and he and Lily and Harry were hiding from Voldemort in Godric's Hollow the night he found them. Lily and James are both buried in the cemetery in Godric's Hollow, along with Kendra and Ariana Dumbledore. Ignotus Peverell, original owner of the Invisibility Cloak and ancestor to Harry, is also buried in that cemetery.
At the end of book six, Harry has decided and wants to visit Godric's Hollow to visit the place where he and his parents lived and where they are now buried. In book seven, Harry still wants this, and Hermione agrees, thinking that perhaps Dumbledore has left the Sword of Gryffindor for Harry with Bathilda Bagshot. They do visit Godric's Hollow and the cemetery as well as the home of Lily and James and Harry, however they do not find the sword there.
Other inhabitants of Godric's Hollow included Bowman Wright, the inventor of the Golden Snitch, and Bathilda Bagshot, a notable historian and author of A History of Magic.