Miniwood is a special flavour of Hollywood that was designed to reduce the sizes of executables compiled by Hollywood. When compiling executables with Hollywood, all standard Hollywood libraries will always be linked to the executable which typically results in executables that are at least 2 MB in size. While this shouldn't be a problem on modern systems, on low-end systems like 68k AmigaOS it might matter to have small executables because memory is limited or you might want to store the executable on a single 880kb disk. This is where Miniwood comes to the rescue because when compiling executables with Miniwood, only the libraries that are actually needed by your script will be linked to the executable.
If you don't care about executable sizes, you can just skip this chapter and Miniwood and just use Hollywood because using Hollywood is slightly more convenient.