Here's a link to a nifty article on the background of olive oil in Italy.
Olive oil has formed the basis of the renowned ‘Mediterranean diet’ for thousands of years, along with its medicinal properties. Homer, the great Greek poet, termed olive oil as being ‘liquid gold’ and Greek athletes would apply olive oil to their skin to render it supple as radiant. The olive tree is native to the southern Mediterranean but it is found in Lebanon, Iran and even parts of China. The olive tree was possibly brought to the Mediterranean by the Etruscans, who clearly delighted in its use. Ancient Etruscan vases depicted the scenes of the olive harvest and the tree was clearly a very special part of their mysterious culture.